Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — NATIONAL FINANCE

Exchange Guarantees

Mr. Tim Renton: asked the Chancellor of the Exchequer what is the extent of the exchange guarantees currently outstanding to foreign holders of sterling.

The Paymaster-General (Mr. Edmund Dell): There are none.

Mr. Renton: Will the Paymaster-General confirm that it is not the Treasury's intention to give any new guarantees for sterling, as it cannot be prudent for sterling to be held at an artificial level while the Government at last search for an effective anti-inflationary policy?

Mr. Dell: There has been a considerable change in the situation since these guarantees existed and since last December, when they were abolished. We have no such intention.

Bank of England (Governor)

Mr. Crawford: asked the Chancellor of the Exchequer when he will next be meeting the Governor of the Bank of England.

The Chancellor of the Exchequer (Mr. Denis Healey): I maintain close contacts with the Governor of the Bank of England, meeting him on a regular basis and also as and when circumstances require.

Mr. Crawford: When the Chancellor next meets the Governor of the Bank of England will he tell him that he will not for much longer be able to rely on the revenue from Scotland's natural resources

to prop up the ailing English pound? These resources will be used to make the Scottish pound one of the healthiest currencies in Europe and will cure our awful areas of deprivation. Is the right hon. Gentleman also aware that the remark he made recently in Scotland, that Scotland cannot stand on its own economic feet, was an affront and an insult to the people of my country?

Mr. Healey: I am not aware that, so far, there have been any revenues from offshore oil, although I hope they will begin with the first flows of oil from the North Sea this week.
The hon. Gentleman will be aware—and will not, I hope, dispute the fact—that Scotland has been getting a great deal more help from the United Kingdom Government than has the rest of the United Kingdom. During a worthwhile visit to Scotland last weekend I came to the conclusion that the views of the hon. Gentleman on Scotland no more represent the views of the Scottish people than do his views on the Common Market.

Mr. Alexander Fletcher: Will the Chancellor note that members of the official Opposition who speak for Scotland have no desire to be associated with members of the Scottish National Party who whine constantly on Scotland's behalf and fail to represent the generous spirit of the Scottish people as members of the United Kingdom.

Mr. Healey: I shall certainly bear that in mind, as I bear in mind the recent evidence of a desire by Scotland's offshore islands, in whose waters the oil is, for separation from Scotland?

Mr. Ridley: In view of the strength of the Scottish economy, as described by the hon. Member for Perth and East Perthshire (Mr. Crawford), will the Chancellor make a start by withdrawing all the heavy subsidies from England on rates and taxes in Scotland, because the English economy is obviously in a terrible state?

Mr. Healey: No, Sir, I shall not. With respect, the hon. Member should not be led astray by the exuberance of the Question Time atmosphere into ignoring the serious problems of urban deprivation in the Glasgow area—probems which


deserve, require and have obtained exceptional help from the United Kingdom Government.

Value Added Tax

Mr. Cryer: asked the Chancellor of the Exchequer how many representations he has had asking him to review the 25 per cent. VAT on television rentals; and if he will make a statement.

Mr. Golding: asked the Chancellor of the Exchequer how many representations he has now received on the proposed rate of VAT on hired television sets.

Mr. Canavan: asked the Chancellor of the Exchequer how many complaints he has received about the increased rate of 25 per cent. VAT on televisions.

Mr. Wellbeloved: asked the Chancellor of the Exchequer what representation he has received requesting him to review the 25 per cent. VAT on television rentals; and if he will make a statement.

The Financial Secretary to the Treasury (Dr. John Gilbert): My right hon. Friend has received over 1,200 representations about VAT on television rentals. The great majority of them have been about the application of the 25 per cent. rate to rentals under existing hiring contracts.

Mr. Cryer: Does not my hon. Friend agree that the 25 per cent. value added tax on television rentals is an unfair and excessive burden, particularly for pensioners? Will he investigate alternatives, such as photographic films, together with cuts in defence expenditure, to produce the £100 million revenue required?

Dr. Gilbert: I understand and share the concern of my hon. Friend about the effect of these proposals on pensioners. However, we have to keep these matters in proportion. The average increase in the rental of monochrome sets will be about 35p a month. For colour sets it will be about £1·10 a month. Any concession related to pensioners or any other section of the community would, unfortunately, be open to abuse and extremely difficult to police.

Mr. Eyre: Is the Minister aware that this is a punishing imposition on poorer people and that the unfairness is specially resented by those renting old television

sets under contract? Scores of constituents have written to me asking why the Chancellor has not restricted this extra tax to new sets, because that at least would be regarded as a fairer approach.

Dr. Gilbert: There is nothing new in the impact of this change under VAT law. It was inherent in the provisions of the Finance Act 1972, which was heartily endorsed by the hon. Gentleman and his hon. Friends. I agree that there has been considerable concern about it. However, it is not necessary for retailers to pass the amount on in the case of the very oldest sets. I happen to rent an old monochrome set from the Dudley Co-operative Society, which I am glad to say has absorbed the charges.

Mr. Canavan: Does my hon. Friend agree that there is a great feeling of public outrage not simply about this increase in taxation but about its retrospective nature, in that it applies to contracts taken out prior to the new operative date, and that it applies to people who unfortunately, perhaps because of financial hardship, had fallen behind in their rental payments on the operative date?

Dr. Gilbert: I should emphasise to my hon. Friend that there is nothing retrospective about the application of these provisions. No payments made with respect to hiring contracts before 1st May will be affected in any way. This is purely an ongoing situation. I should also draw my hon. Friend's attention to the fact that at such time as the higher rate of VAT may come down in the future it will be the renters who will benefit. The people who will have bought their sets at the higher rate will be stuck with paying for them at that rate.

Mr. David Howell: The Minister says that we must keep this matter in proportion. Does he not agree that it affects 12 million people, including the poorest sections of the community? Would it not have been far fairer to cut public spending rather than put this additional burden on the elderly and those who can least afford it?

Dr. Gilbert: The hon. Gentleman will be well aware that the present Government have done more for the elderly than his party ever considered doing. We have arranged for pensions not only to go up


in line with rises in the cost of living, but to go further and rise with general increases in the standard of living as reflected in wage rates.

Mr. Wellbeloved: My hon. Friend must understand that there is real disquiet among retirement pensioners about this matter. Will he be a little more flexible and at least say that he will discuss it with his right hon. Friend the Chancellor of the Exchequer? Perhaps it would be helpful to pensioners owning old sets if he spelt out a little clearer, here and now from the Dispatch Box, what he means by saying that the extra VAT on old sets need not be passed on by retailers.

Dr. Gilbert: Of course, I recognise the concern which has been expressed by my hon. Friend and by other hon. Members, but the decision whether to pass on the VAT must be a matter for the commercial judgment of the firm concerned. We must recognise, of course, that when VAT was first introduced not all rental firms increased their rentals by the amount of the tax. It is very much a question of the firm's commercial judgment whether it can absorb all or part of this increase itself or must pass it on to its customers.

Miss Fookes: Do not the points raised by hon. Members on both sides of the House reveal the folly of departing from a uniform tax, and are not the Government returning to all the ridiculous anomalies that we had with purchase tax?

Dr. Gilbert: If the hon. Lady is under the impression that the original VAT at a single rate was free of anomalies, I could spend a great deal of time disabusing her of that illusion, but I should be abusing the time of the House. My right hon. Friend decided, quite correctly, that it was time to reintroduce a proper system of discrimination into indirect taxation in this country, and his proposals received the approval of the House.

Mr. Trotter: asked the Chancellor of the Exchequer what is his estimate of the cost to the Revenue of increasing the exemption limit for VAT from £5,000 to £7,000 so as to allow for the fall in the value of the £ sterling since the limit was originally fixed at £5,000.

Dr. Gilbert: To increase the VAT exemption limit to £7,000 would cost about £15 million a year.

Mr. Trotter: May I ask the Financial Secretary to increase the limit? May I point out to him that many thousands of small traders are now being brought within the complexities of the VAT regulations? Does he agree that, with inflation, now is the time to raise the limit? It must be increased at some time. Surely this is the time to do so.

Dr. Gilbert: I do not necessarily follow the hon. Gentleman in all of his inferences. We have had no recent representations from any trade bodies, and only a few suggestions from individuals, that the limit be raised.

Mr. Burden: Does not the hon. Gentleman agree that this figure is quite unrealistic in present circumstances and that many individual self-employed shopkeepers will take up so much time in filling in these forms that they will be unable to get on with their business?

Dr. Gilbert: I ought to make it clear to the hon. Gentleman that registration is not without certain benefits, as it enables a firm that is registered to reclaim the input tax deduction. I recognise that there are costs and benefits which run both ways in this situation. It would also not be entirely to the advantage of firms already registered to be relieved of registration, because they would also have to pay tax on their existing stocks and assets.

Mr. Gould: asked the Chancellor of the Exchequer whether he will now seek to raise the point at which firms have to register for VAT.

Dr. Gilbert: I have noted my hon. Friend's suggestion.

Mr. Gould: Does my hon. Friend agree that by far the greater proportion of the VAT revenue is obtained from large concerns and that the cost of collecting that proportion is comparatively low? Does he also agree that as inflation attracts more and more small concerns into the VAT net the administrative cost and burden of VAT is massively increased with a correspondingly small increase in revenue?

Dr. Gilbert: I am seized of the general points which my hon. Friend makes, but I cannot usefully add anything to what I said in reply to an earlier Question. The effect of registration is not clear-cut, one way or the other. There are benefits to small traders to offset the administrative costs that registration brings for them.

Mr. Marten: As we might have to begin to harmonise VAT with our partners in the Common Market, will the Minister tell us the starting points for VAT in some of the Common Market countries?

Dr. Gilbert: As far as I am aware, the highest registration level in any Common Market country is £1,800 a year, and discussions—which are by no means binding on us, and no decisions have yet been taken—are centring around a possible figure of £1,600 a year.

Mr. Brotherton: asked the Chancellor of the Exchequer why VAT at 25 per cent. is levied on labour charges for repairing washing machines.

Dr. Gilbert: It is desirable that, in general, the 25 per cent. rate of VAT should apply both to the servicing of, and to spare parts for, goods which are themselves chargeable at 25 per cent., so as to reduce anomalies and to remove incentives to distortion of trade.

Mr. Brotherton: Does the Financial Secretary agree that literally millions of wives, mothers and working women regard a washing machine as a necessity and not as a luxury? Will he reduce this rate of tax from 25 per cent. to 8 per cent. and certainly give that reduction priority over any reduction in the VAT on television rentals?

Dr. Gilbert: I welcome this opportunity to make clear yet again that we have never suggested that the 25 per cent. rate was being applied solely to luxuries. My right hon. Friend the Chancellor made it clear that so many things that used to be considered luxuries are no longer considered so—items like television sets and washing machines. It was inevitable, if he was to raise the revenue he thought necessary in the public interest, that certain things which are to be found in every home and are not considered luxuries

would have to carry the higher rate of tax.

Mr. Wigley: Is the Financial Secretary aware that the vast majority of washing machines manufactured in the United Kingdom are made in Wales—at Llandudno Junction and Merthyr Tydfil, and that these are in areas of high unemployment, in special development areas? In the light of that, will he reconsider the 25 per cent. level of VAT on washing machines, so that there can be a boost for this industry and for these areas?

Dr. Gilbert: I accept the general proposition in the hon. Gentleman's remarks, but my right hon. Friend made it quite clear in his Budget Statement that the impact on his proposals upon employment was one which had caused him the greatest concern. We estimate that over every section of industry affected by VAT the total effect on employment of all the measures will be no more than about 20,000 jobs, which, regrettable as it is, means considerably less for the washing machine industry alone.

Mr. Fernyhough: Does my hon. Friend agree that, whatever the grievance about VAT, this tax is part and parcel of the price we pay for entering the Common Market? Does he further agree that, whatever the lamentations on this subject now, there will be even more lamentations as and when the tax is harmonised with the rest of Europe?

Dr. Gilbert: My right hon. Friend's Budget proposals were directed solely to the economic position of this country, and were—as he was the first to acknowledge—a regrettable but necessary result of the inflation we found here a home.

Mr. Richard Wainwright: asked the Chancellor of the Exchequer whether he will take steps to ensure that traders' VAT records can be reconciled with their financial accounts.

Dr. Gilbert: It is part of the duty of a Customs and Excise officer, when he visits a trader for VAT purposes, to verify that VAT records and financial accounts are consistent.

Mr. Wainwright: Does the Financial Secretary agree that the job of the Chancellor is to collect taxes fairly, with the smallest number of snoopers and the least


inconvenience to the taxpayer? Does he agree that this could be achieved if he would call off the stupid civil warfare between the Inland Revenue, on the one hand, and the Customs and Excise, on the other, which prevents the reconciliation of trading accounts, which are sent to the Inland Revenue, with the VAT records, which go to the Customs and Excise?

Dr. Gilbert: It is news to me that there is warfare or anything but total harmony between the officials of the Customs and Excise and the Inland Revenue. Certainly no representations have been made to me on that account. It is worth emphasising that the Customs and Excise does not require VAT records and accounts to be kept in a special form. This is entirely a matter for the retailer. There is a need to police reconciliation between cash accounts and what has been charged for supplies of goods and services.

£ Sterling (Value)

Mr. Adley: asked the Chancellor of the Exchequer what is now the value of £1 sterling expressed in terms of the value of £1 sterling on 28th February 1974.

Mr. Peter Morrison: asked the Chancellor of the Exchequer what is the purchasing power of the £1 sterling at the latest available date, compared with 1st March 1974.

Dr. Gilbert: Taking the internal purchasing power of the pound as 100p in February 1974, its value in April 1975, the latest date available, is estimated to be '79p. This estimate is based on the changes in the General Index of Retail Prices.

Mr. Adley: Is the Minister aware that that really frightening answer is a direct result of 16 wasted months of Socialism? Will he tell his right hon. Friends the Chancellor of the Exchequer and the Prime Minister that their policies, if allowed to continue as they have in the last 16 months, are in danger of turning this country into a banana republic without bananas? Will he now give an assurance that the Government have decided to pluck up courage, ignore the rantings of the Tribune Group, and start fighting inflation, before that 79p becomes 50p by the end of the year?

Dr. Gilbert: The hon. Gentleman will be well aware of the proposals that my right hon. Friend brought forward in his last Budget for combating inflation. The hon. Gentleman will also no doubt be well aware of the extremely constructive proposals that have recently emanated from the TUC in this direction, many of them put forward by people who might have a great deal of sympathy with the objectives of the Tribune Group.

Mr. Lipton: Will my hon. Friend the Minister say how many Opposition Members have offered to exchange their £1 notes for 79p?

Mr. Morrison: Will the Financial Secretary assure me that the reason why the Chancellor has not answered this Question is that the figure is really so appalling? Does he agree that to reduce the rate of inflation would involve a cut in Government expenditure, which would involve the abandonment of the Community Land Bill and, indeed, the Industry Bill?

Dr. Gilbert: The reason I am answering this Question is that it always falls to the junior Minister at the Treasury to answer Questions on the purchasing power of the pound, under both administrations.
As for cutting public expenditure, the hon. Gentleman will be well aware of my right hon. Friend's proposals in that respect, both for this year and for next year. Therefore, I hope that, arising out of his supplementary question, the hon. Gentleman will be able to recognise the difference between public expenditure which is merely connected with the acquisition of assets and that which has an effect on demand for resources.

Mr. Powell: Has the Treasury, in contemplating the exchanges this week, been encouraged by the immediate boost given to confidence in sterling by the outcome of the referendum last week—as the electorate were deceived by being promised?

Dr. Gilbert: I am glad to be able to reassure the right hon. Gentleman that the exchanges today are quite stable.

Inflation

Mr. Lane: asked the Chancellor of the Exchequer what is his estimate of the


current rate of inflation; and what action he is taking designed to reduce it.

Mr. Rost: asked the Chancellor of the Exchequer what is the current rate of inflation.

Mr. Skinner: asked the Chancellor of the Exchequer if he is satisfied with the current rate of inflation; and if he will make a statement.

Mr. Teddy Taylor: asked the Chancellor of the Exchequer what his estimate is of the current rate of inflation; and what action he is taking to reduce it.

Mr. Healey: The increase in the retail prices index in the 12 months to April was 21·7 per cent. I explained in my Budget Statement the damage which would be caused if inflation continued at this rate.

Mr. Lane: In view of this runaway inflation, is it not high time, as some of us have been pressing, that the Government acted with a sense of urgency? If the Government now bring forward counter-inflation measures that are tough and relevant, including an effective voluntary incomes policy, is the Chancellor aware that, whatever view may be taken by some of his hon. Friends below the Gangway, he will be supported by a large number of people, of all parties and none, inside and outside the House?

Mr. Healey: Let me say seriously, first, that I recognise that inflation is by far the most serious and urgent problem which the Government and the people of this country have to face. I hope that the Government will have the support of all men of good will, in all parties and none, in any measures that they find necessary to tackle it. In reply to the earlier part of the supplementary question, I refer the hon. Gentleman and the noisy gaggle on the third bench above the Gangway to the remarks contained in the Financial Times editorial this morning:
The temptation to search for some more immediate and dramatic gesture … could now prove a dangerous one. … The Chancellor's belief that the rate of inflation is now nearing its peak has a good deal of evidence to support it.
I ask the House to recognise that the attack on inflation is not one for the Government alone. It requires the sup-

port of both sides of industry and, inevitably, to obtain support for action on the scale and of the severity required takes some time. The Government are determined to reach conclusions on this matter in the coming weeks with a view to halving the rate of inflation within the next 12 months.

Mr. Skinner: Does my right hon. Friend understand that there are still many hon. Members on the Government side of the House who believe that we were sent here with a mandate not to interfere with the free collective bargaining process? Among the reasons for the present high rate of inflation are the relaxation of price controls and the relaxation on business rents. If my right hon. Friend wants to conquer the problem, he has to look in the direction of import controls and matters of that kind—if the Common Market countries let him. Therein lies his answer, and that is the policy he should be pursuing.

Mr. Healey: I understand the points made by my hon. Friend—and that is why I do not agree with him. My hon. Friend must recognise that the TUC, well-nigh unanimously, last year committed itself to guidelines for collective bargaining which it now recognises have not been fully upheld. The TUC is searching for more stringent guidelines for the next wage round and for ways of ensuring that they are complied with. I hope that the TUC will have the support of my hon. Friend in the conclusions which it seeks to reach on this matter.

Mr. Rost: Will the Chancellor now answer the original Question, which is being asked by the whole country? When will this rabble of a coalition Labour Government start to govern—before or after national bankruptcy?

Mr. Healey: From the fierceness of some of the supplementary questions asked from the Opposition benches, I have the impression that the Opposition are fully aware that the Government are governing but do not like some of the things that the Government are doing.

Mr. Biffen: indicated assent.

Mr. Healey: If we are discussing inflation—I saw the hon. Member for Oswestry (Mr. Biffen) nod his head when I made that last remark and I hope he


will nod his head again to my next remark—it is the view of a large section of the Conservative Party that the scale of inflation from which we are now suffering is due to the total failure of the previous Conservative administration to control the money supply.

Mr. Biffen: indicated assent.

Mr. Spriggs: Is my right hon. Friend aware that several of the largest firms in the country do not attribute inflation to wages and salaries but draw our attention to the high cost of oil? What is my right hon. Friend doing about that?

Mr. Healey: Last year the fivefold increase in the cost of oil was one of the major causes of inflation. The increased cost of our imports, not only oil but sugar, commodities and many food stuffs, was a major factor. The major cause of inflation this year is excessive wage settlements, and I think that that is the general view of both sides of industry. On the question of what I am doing to bring down the cost of oil, I assure my hon. Friend that the Government are co-operating with all other consuming Governments in negotiations with the oil producers in the hope of producing greater price stability. My hon. Friend will recognise that the level of oil prices cannot be determined by the Government.

Mr. Taylor: Does the Chancellor agree that the present rate of inflation is dangerous and, if it continues, could be disastrous? Is he planning new measures to come into operation over the next few months? To avoid uncertainty, are the Government still absolutely opposed to any form of statutory wage constraint?

Mr. Healey: Yes, Sir, I made clear only the other day in Glasgow that the Government oppose legislative interference in the bargaining process, and I gather that the great majority of right hon. and hon. Members on the Opposition benches agree with us on that matter. We are engaged in continuous discussions with the leaders of the TUC to try to achieve a satisfactory arrangement for collective bargaining during the next wage round. The Government, like other public authorities, also have responsibilities as an employer, which they intend to carry out.

Mr. Atkinson: Does the Chancellor agree that if the present under-utilised manufacturing capacity were henceforth utilised, it would reduce labour costs and would be the biggest contributory factor to reducing the overall level of inflation? How does that square with the answer that my right hon. Friend has just given?

Mr. Healey: My hon. Friend will be aware that no one wishes more than I to be able to take the measures which I know to be available to achieve fuller use of capacity in this country but, so long as wage settlements run at their present rate and produce inflation at its present rate, those measures would greatly aggravate our problems both on the side of inflation and on the side of balance of payments. So long as we have to finance 5 per cent. of our spending by borrowing from foreigners, my hon. Friend cannot ignore the attitude which foreigners take on this problem. I hope that I shall have my hon. Friend's support in ensuring that we get the rate of inflation down to a level which will enable us to take our own decisions without regard to considerations of that kind.

Sir G. Howe: Does the Chancellor recognise that if we face this matter with the seriousness it deserves, he can no longer go on blaming the present inflationary situation on the policies of the previous Conservative Government? As he has acknowledged, the major cause of the high rate of inflation now is the extent to which wage settlements have roared ahead—and, we would argue, have been encouraged to roar ahead—because of some provisions of the social contract? Will the Chancellor further accept that the nation is thoroughly alarmed and disturbed by the apparent failure of the Government to come to grips with this problem? Does he realise that the nation would be willing to support the action which is necessary to tackle inflation as our major and overriding problem? Will he echo the words used by the Paymaster-General yesterday when he said there was an overwhelming need for urgency in bringing a better balance both in our overseas payments and in our Government accounting? That is the urgent action which the country awaits.

Mr. Healey: Personally I do not disagree with very much of what the right


hon. and learned Gentleman said, but he will be well aware that a very large number of his right hon. and hon. Friends—one of them sitting beside him at this moment—take the view that the present level of wage settlements would have been impossible without the increase in the money supply which was organised by the last Conservative Government. I remember the hon. Member for St. Ives (Mr. Nott) making this very point himself just before he accepted appointment in the present Shadow Cabinet. If the right hon. and learned Gentleman is to be taken seriously he must ensure that the leader of his party, whom we are sorry but not surprised to see absent again from the Opposition Front Bench, does not make speeches like the one she made last night, in which she recommitted the Conservative Party to introduce a tax credits system which would add over £2 billion to the public sector borrowing requirement in 1975 according to figures published by the last Conservative Chancellor.

Mr. Nott: The Chancellor is well aware that the first stage towards a tax credits scheme is nothing more than the child endowment proposition which the Chancellor is putting forward as his own policy. Since the right hon. Gentleman referred to me, is he aware that many of my right hon. and hon. Friends and myself believe that the greatest single obstacle to a counter-inflation policy at the present time is the Prime Miinster, who seems incapable of doing anything but trimming on every single issue?

Mr. Healey: I regret to say that I am not surprised that the hon. Gentleman chose to try to defend his rather mixed record in this matter by attacking my right hon. Friend the Prime Minister, but it remain a fact that the leader of his party committed herself to introduce a tax credits scheme as soon as the Conservative Party returned to power. Fortunately, we know that that event is likely to be very long delayed.

Confederation of British Industry

Mr. MacFarquhar: asked the Chancellor of the Exchequer when he next intends to meet the CBI.

Mr. Healey: I meet representatives of bath the CBI and the TUC regularly at

NEDC. The next meeting of the council is on 17th June. I also meet representatives of these organisations separately on occasion, but have no immediate plans to do so.

Mr. MacFarquhar: When my right hon. Friend next meets the CBI will he discuss with it the evidence put forward in a recent article in the Economic Journal, to the effect that British manufacturing companies pay very little tax? Is he aware that in 1973 British manufacturing companies apparently paid only 14 per cent. tax on their profits, and, in view of this, will he inquire of the CBI why these companies continually complain that they have no incentive to invest, when this low rate of tax is due to their ability to defer tax with investment?

Mr. Healey: I shall certainly read the article to which my hon. Friend has referred, and if it seems suitable to do so I shall draw it to the attention of the CBI. However, the tax burden which has fallen on British manufacturing industry in recent years has been very substantial. This was one reason why I arranged for tax relief on stock appreciation, both in the last Finance Bill and in the one now passing through Committee.

Mr. Body: When the Chancellor next meets the CBI will he confess to it that he now discerns a connection between the appalling rate of increase of inflation since he became Chancellor and the appalling increase in the net borrowing requirement since he became Chancellor, which now works out at 50p per week per man, woman, and child?

Mr. Healey: I think that there is a connection between the two, but not in the direction that the hon. Member suggests. The fact is that the very high borrowing requirement is largely a consequence of inflation, and has not been its cause.

Mr. Dalyell: Is my right hon. Friend yet in a position to say anything to industry about budgetary proposals in respect of the ferrous foundry industry?

Mr. Healey: There is a wide welcome in the ferrous foundry industry and in the industry served by it for the scheme


of investment assistance which I announced in my last Budget.

Sir G. Howe: When the Chancellor meets the CBI will he take the opportunity of making clear the Government's overriding determination to fight inflation, of spelling out the implications of that policy, of making it clear that a continued link between price increases and wage increases will pave the way to further inflation, and of securing his own understanding of the fact that a large public sector deficit, now increased by £20 billion over two years, is one of the most significant causes of inflation, that it must be reduced, that the consequences of that must be carried through in cash limits on Government spending and in the acceptance by the Government of their own role as a major employer in the British economy?

Mr. Healey: I do not think the CBI has any doubt about the priority which I give to the struggle against inflation—but if I may attempt to straighten out the right hon. and learned Gentleman in his rather confused supplementary question, he must recognise that a large public sector deficit, such as we now have, is damaging to the economy in many respects. I am seeking to reduce that deficit. It is not primarily damaging because of its effect on inflation. West Germany currently has a public sector deficit—and, indeed, is planning for a deficit as large as we have in Britain—yet its rate of inflation is scarcely one third as high.

National Insurance Contributions

Mr. McCrindle: asked the Chancellor if the Exchequer what representations he has received from self-employed people requesting that national insurance contributions be made subject to tax relief.

Mr. Dell: We have received a considerable number of representations on this matter. The suggestion was the subject of a Finance Bill amendment discussed by the House on 10th June, and I refer the hon. Gentleman to what my hon. Friend the Minister of State said in reply to that debate.

Mr. McCrindle: Has the Minister seen reports in today's Press that yesterday in Belgium there took place the first

national strike of the self-employed—a strike that caused the interruption of many important services? Is he not slightly afraid that if the Government go on turning down reasonable requests from the self-employed, such as the one to which the Question refers, the time may not be far ahead when the same thing will happen in this country?

Mr. Dell: I have not seen the reports to which the hon. Gentleman refers. There have been many debates on the subject in this House. On 26th February my right hon. Friend the Secretary of State for Social Services indicated that there was to be an inquiry into certain aspects of this matter, which would include tax aspects. I hope that the hon. Gentleman will stand on that for the moment.

Mr. George Cunningham: Now that all contributions to the National Insurance Fund are earnings-related, does the Minister accept that there is a situation different from that which existed in 1965, when tax relief on such contributions was withrawn? Is there any chance, in this new situation, of the Chancellor's reviewing the desirability of tax relief on all such contributions?

Mr. Dell: It is not our view that there should be any change in the tax position from what now exists. However, the tax aspects of the matter can be looked at in the context of the inquiry announced by my right hon. Friend.

Borrowing Requirement

Mr. Ridley: asked the Chancellor of the Exchequer what is his latest estimate for the borrowing requirement for 1975–76.

Mr. MacGregor: asked the Chancellor of the Exchequer what change there has been in the public sector borrowing requirement since his Budget Statement.

Mr. Dell: It is not customary to give forecasts of public sector borrowing except at Budget time.

Mr. Ridley: Is the Minister aware that the borrowing requirement is thought to be at the heart of our economic problem in relation both to inflation and to the worsening balance of trade? Will he deny implications that the borrowing


requirement has risen even in the two months since the Budget? It he were able to make such a statement, it would have a good effect on confidence in our currency.

Mr. Dell: If the hon. Gentleman is referring to an article in The Times Business News the other day, my view is that one cannot base on two months' figures the implications which the article made. As for the borrowing requirement being at the centre of our problems, my right hon. Friend has placed great emphasis on the fact that it should be brought down. There are many other aspects of our problems to be considered.

Mr. MacGregor: Will the Minister give an assurance that if the public sector borrowing requirement goes above the estimate which the Chancellor originally put forward in his Budget estimate—whether as a result of changes in Government policies or inflation through wage settlements beyond the assumptions made when the borrowing requirements were drawn up—the Chancellor will bring before the House proposals to cut back public expenditure borrowing requirements to the original estimate?

Mr. Dell: My right hon. Friend has already indicated his intentions in respect of public expenditure in the past year and the cuts which he intends to make in the increase in the rate of public expenditure. He has also indicated on many occasions, as, indeed, all Chancellors do, that from time to time he will take whatever measures are required.

Mr. Hooson: Will the Minister refute the suggestion made by his right hon. Friend that the public sector deficit in Germany is the same as in this country, since in Germany it is a much smaller proportion of the gross national product than is the case in the United Kingdom? What steps do the Government intend to take to deal with the juggernaut of public service expenditure here, arising largely from the so-called reorganisation of local government and the National Health Service under the Conservative Government? What do the Government intend to do about that expenditure, whose main components are wages and salaries?

Mr. Dell: There has been an increase in the borrowing requirement in Germany.

On the question of local government expenditure, the hon. Gentleman knows of the existence of the council, under the chairmanship of the Secretary of State for the Environment, which has been set up to discuss these matters.

WOMEN IN PUBLIC LIFE

Mr. Canavan: asked the Prime Minister what actions Her Majesty's Government propose in response to Commonwealth Conference discussions on the role of women in public affairs.

Mr. Tomlinson: asked the Prime Minister how, following discussions at the Commonwealth Heads of State Conference, Her Majesty's Government propose to provide for the full participation of women in our national and international affairs.

Mr. Grocott: asked the Prime Minister whether he will make a statement on the role of women in the political, economic, social and cultural life of the United Kingdom following the discussions at the Commonwealth Conference in Jamaica.

Mr. Wrigglesworth: asked the Prime Minister if, following the Commonwealth Heads of State Conference communiqué, he will make a statement on the role of women in public affairs.

The Prime Minister (Mr. Harold Wilson): This Government are fully committed to the objective of securing equal status and opportunities for women in all aspects of our national life. A comprehensive Sex Discrimination Bill—which makes sex discrimination unlawful in employment, education and in the provision of the general run of goods, facilities and services to the public—is now before the House.

Mr. Canavan: Bearing in mind the words of Mrs. Burnham, of Guyana, that the best way to achieve women's liberation is through Socialism, will the Prime Minister explain the sudden reduction in the role of women in the Ministry of Overseas Development, following the replacement of the only Member of Parliament in Scotland who is both a Socialist and a woman by a successor who is neither?

The Prime Minister: I have not found the matter confusing. With regard to the Commonwealth Conference, a leading part in this question has been taken not only by Mrs. Burnham but by her husband Mr. Forbes Burnham, the Prime Minister of Guyana. On the other issue raised by my hon. Friend, there was no discussion of these matters at the Commonwealth Conference in Jamaica.

Mrs. Winifred Ewing: May I invite the Prime Minister to join me down memory lane by recalling the occasion when he attended a most enthusiastic rally to mark 50 years of votes for women? Has he noticed that there are only 27 women Members of Parliament out of a total of 635 Members in this House? Does he agree that that is not a particularly attractive ratio? Has he noticed that my party does best, because we have two women Members of Parliament out of 11 Members in our ranks, while the Liberals, the Ulster Unionists and, I regret to say, Plaid Cymru have not one woman Member of Parliament to brighten up their benches? If we consider Scotland, we find that the Labour and Tory Parties have only one woman Member each. Should not the Prime Minister—

Mr. Speaker: Order. That is enough.

The Prime Minister: Let me correct the hon. Lady. The ratio, although small, is highly attractive. I recall that last week the hon. Lady asked me to go to Stornoway with her, and this week she wants me to join her. As for the celebrations of 50 years' votes for women, I did join the function that the hon. Lady referred to, and I also took part in a reception marking International Women's Year. I believe the hon. Lady made a valid point. I believe that all the major parties can be subjected to the criticism—it is a fair one—that we do not have more women Members of Parliament, particularly in the more winnable seats. That is no derogation of the high quality of many Members in all parts of the House, not least in my own party.

Mr. Tomlinson: Will my right hon. Friend accept that many of us would welcome the appointment of a woman and a Socialist as chairman of the commission which has recently been announced to deal with discrimination

against women? Will he ensure that the commission not only has the legal armoury that lies behind the Sex Discrimination Bill but has adequate funds and staff to deal with the task that lies before it?

The Prime Minister: I know that that is the intention of my right hon. Friend the Home Secretary. As my hon. Friend knows, it is widely conceded that the Sex Discrimination Bill, which has now been reported from Committee, is the most comprehensive legislation of its kind in the democratic world. It is the intention of my right hon. Friend and his colleagues at the Home Office to ensure that it is a question not only of legislation but of a follow-up by the administration.

Mr. Graham Page: What did the Prime Minister mean when he referred in his first answer to "comprehensive sex?"

The Prime Minister: The word "comprehensive" governed the Bill, not the sex. I referred to a comprehensive Sex Discrimination Bill. I hope that that is clear to the right hon. Gentleman. In case he was raising wider questions, I think that these are matters for consenting adults in private, for which the Government have no responsibility.

Mr. Grocott: I welcome the fact that in a number of Commonwealth countries women have obtained high, if not the highest, positions in their political systems, but does my right hon. Friend share my concern that during International Women's Year the prospect of there being a woman Prime Minister in Britain is no nearer now than it was six months ago?

The Prime Minister: I do not agree with my hon. Friend in this matter. There are more women members in this Government—as, indeed, there were in previous Governments which I headed—than was the practice under Governments of other parties. I believe that the present Cabinet is the first to have two women Cabinet members. I look forward to more.

Mrs. Thatcher: As some people in public affairs are capable of cutting through the trivia to the real problems of the nation, may I, as a woman in public affairs, ask the Prime Minister what action


he proposes to take to deal with the main problem facing the nation—that of inflation?

The Prime Minister: I agree with the distinction made by the right hon. Lady, but when she spoke for 50 minutes in the debate on economic affairs she did not cut through any trivia. She did not get to the real problems, or offer any real solutions. Nor, I understand, did she take advantage of the 45 minutes during which my right hon. Friend the Chancellor answered Questions today to put any relevant questions. I refer her to the answers given by the Chancellor of the Exchequer this afternoon.

Mrs. Thatcher: The Prime Minister can talk out Question Time but he cannot talk out the crisis facing the nation. He talked out the economics debate. How much longer is he going to dodge the real issue?

The Prime Minister: Had the right hon. Lady been listening to my right hon. Friend she would have heard what he said, especially about our discussions with the TUC as well as with the CBI. I would have hoped that she would have reports on the matter. I am surprised that she has not warmly welcomed the initiative taken by the TUC this week. I am surprised that she has not welcomed the initiative taken by Jack Jones, and the warm follow-up which is being given to these matters by the Government. The right hon. Lady has said that she is opposed to a statutory pay policy. If she has any ideas apart from those which we are following—which she condemns—she should let the House know what they are.

PRIME MINISTER (OFFICIAL ENGAGEMENTS)

Mr. Golding: asked the Prime Minister if he will list his official engagements on the 12th June.

The Prime Minister: In addition to a meeting of the Cabinet and a number of official meetings with my colleagues and others, I took the opportunity of the President of Romania's stop in London to entertain Mr. Ceausescu to breakfast at Chequers this morning.

Mr. Golding: Will the Prime Minister take time to study the newspaper reports of yesterday's meeting of the TUC economic committee, which gave an enthusiastic welcome to Jack Jones's proposals to restrict wage increases next year? In view of that, and the other indications of the trade unions who want to pursue reasonable wage policies, will the Prime Minister and the Chancellor take an early initiative in this matter?

The Prime Minister: Yes, Sir. I referred to that matter in answer to a question by the right hon. Lady.
My hon. Friend will be aware that in the speech which I made to the CBI just before the recess I welcomed the initiative taken by Mr. Jones on the question of flat rates, because many of these problems are due to differentials—people maintaining percentage differentials which increase cash differentials. I said that these initiatives were well worth studying. My hon. Friend knows that that and other proposals which I have put to both sides of industry are being pursued by the Government. The House knows from its experience last year and from the wise words of the right hon. Lady the Leader of the Opposition that this problem must be solved by consent and agreement. That is what we are pursuing. It might help if what is being achieved by the trade union movement were sometimes praised by the Opposition, and not always criticised.

Mr. Charles Morrison: I believe that on 8th June the Secretary of State for the Environment said that the country was on a suicide course. Regrettably, judging by events, that seems to be true. Does the Prime Minister agree with that statement? When will he take action to get us off that course?

The Prime Minister: I described the action taken before and since the speech made by my right hon. Friend—action which we are continuing to take. My right hon. Friend warned everyone concerned with wage claims to ensure that as far as possible there was full compliance with the guidelines. We now know that the TUC is taking new initiatives in these matters, which are of great importance. A little encouragement from the Opposition benches might help.

Mr. Mike Thomas: Does the Prime Minister agree that one of his official engagements today should be to meet the new Secretary of State for Industry, to start thinking about those areas of British industry in which the Government might invest, through the National Enterprise Board, to get Britain ahead again—rather than just to preserve existing employment—to promote change, and to get us into the growth areas, the winning areas for Britain?

The Prime Minister: My hon. Friend knows that that is one of the major purposes of the Industry Bill and of the National Enterprise Board. Last year I insisted that we made more rapid progress than was then being made with both the drafting of the White Paper and the introduction of the Bill, so that the Bill could be put before the House and passed into law this Session. I regard it as essential in relation to investment, to the point mentioned by my right hon. Friend, and to the future industrial development of this country. I have made that clear on many occasions. My hon. Friend can rest assured that I shall take every measure posible and exert all the pressure possible to ensure that the Industry Bill, and all that it means in terms of the National Enterprise Board, becomes a reality at the earliest possible moment. I look to my hon. Friends and hon. Members in various parts of the House to help in getting it through.

Mr. Thorpe: Although this is not on the Prime Minister's list of engagements for today, has he any plans which he might formulate today to meet either the board of British Rail or the National Union of Railwaymen? If so, what advice will he give them?

The Prime Minister: The right hon. Gentleman is fair to put this question. He will understand that the Government are naturally watching this matter very carefully and are greatly concerned about it. Talks have been going on between the two sides. This is a matter of the highest importance. Perhaps the right hon. Gentleman would not press me immediately about any engagements—I am certainly not making any today—in this matter.

WORLD FOOD PRODUCTION

Mr. Weetch: asked the Prime Minister how Her Majesty's Government will support the view of the Heads of State Conference in Jamaica on the need to increase world food production.

Mr. Jim Marshall: asked the Prime Minister what actions the Government propose to give effect to the Commonwealth Conference view of the need to increase world food production.

The Prime Minister: As I informed other Heads of Government in Kingston, we have adopted an aid strategy geared to the poorest countries and to rural development. We intend to intensify our efforts in these directions.

Mr. Weetch: Does my right hon. Friend agree that adverse movements in the terms of trade for primary products often have a disastrous effect on the economies of developing countries? Does he agree that these are best countered by a framework of commodity price indexing? Will he let the House know his thoughts on this matter? Will he tell the House whether the Government will have anything substantial to contribute in that respect to the meeting of the Commonwealth Finance Ministers in August and to the special session of the United Nations General Assembly in September?

The Prime Minister: Yes. My hon. Friend will be aware that the point he raised was at the centre of my proposals on commodities, including food and other primary commodities—namely, that boom and bust in commodity prices has the worst possible effects on developing countries—and our determination, with other countries, was to obtain some redress or reversal of the balance between the developing and the developed countries in these matters. That was the purpose of my proposal. It was widely welcomed by the Commonwealth and has been welcomed by many other countries since then.
Indexing is a highly technical and difficult matter. I said in that speech that it must be studied. I spelled out some of the practical difficulties. If my hon. Friend has not read my speech I


shall be glad to send him a copy, as it might weary the House if I went into all the technicalities of indexation while answering this question.
The working party that was set up was due to meet this week and is expected to produce its report in time for the Ministers who attend the special session of the United Nations in September. It will also be available to the Commonwealth Finance Ministers because they meet in the same week in September.

Mr. Tapsell: Has consideration been given to the possibility of a formal approach by the Commonwealth to the member nations of the OPEC group, many of the richest of whom are extremely keen to develop food production but have been finding difficulty in identifying suitable schemes and, when they do so, in finding technicians for development?

The Prime Minister: I think that the idea is right but that the machinery proposed by the hon. Gentleman—that the Commonwealth as a whole should meet the OPEC countries for this purpose—is not necessarily right. A number of OPEC countries have, with considerable generosity, approached developing countries in Africa, Asia and elsewhere and given them considerable financial and higher technical assistance. We are all concerned over this matter.
I welcome these developments, but I am not sure that it should be a kind of bilateral Commonwealth-OPEC approach.

Mr. Henderson: Does the Prime Minister accept that hon. Members on both sides of the House welcome the increase in food production to feed a hungry world? What is the Government's attitude towards the Common Market policy of encouraging people to discontinue horticultural production rather than providing money to allow them to continue?

The Prime Minister: While not wanting to take the House back into those exciting weeks which ended last Thursday, I should have thought the opposite was the case. It may be true with regard to individual products. But the hon. Gentleman will know that the widening up of the developing world to the markets of

Europe, and, indeed, more widely, is essential to what I know he has in mind.

Mr. Hooky: Does the Prime Minister agree that it is not only the production but the distribution of food which is important? What proposals will the Government be making to other members of the European Community in future to prevent the immoral accumulation of surpluses deliberately taken off the market?

The Prime Minister: I certainly agree about distribution. I think that distribution costs are important. This ties up with what the Prime Minister of Jamaica strongly pressed on me. There have been recent inquiries in this country, for example, about the distribution of fruit and other produce from the Caribbean, to see whether the costs were excessive. That is the line on which we should be working at this time. My hon. Friend will know that we recently had a conference in this country, on our initiative—the Commonwealth Ministerial Meeting on food production and rural development, at which these questions were considered.
Regarding food surpluses in the Common Market, my hon. Friend will know that as a result of the negotiations undertaken by my right hon. Friend the Minister of Agriculture, a number of steps, such as tighter price and cost control, are likely to lead to a much lower accumulation of surpluses in future. We ourselves are not involved in storage. We have secured other means of dealing with surpluses. My hon. Friend will also know that when a mountain developed, since the renegotiations began, it was the British Government who insisted that, instead of selling it off to the Soviet Union, as was done by the previous Government, it should be made available to pensioners in Britain at specially subsidised cheap prices.

BUSINESS OF THE HOUSE

Mrs. Thatcher: May I ask the Leader of the House to state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): The business of the House will be as follows:
MONDAY, 16TH JUNE—Supply [18th Allotted Day]: there will be a debate on housing which will arise on a motion for the Adjournment.
Remaining stages of the British Leyland Bill.
TUESDAY, 17TH JUNE—Supply [19th Allotted Day]: there will be a debate on the Army on a motion for the Adjournment of the House.
Second Reading of the Public Service Vehicles (Arrest of Offenders) Bill [Lords].
Proceedings on the Export Guarantees Bill [Lords] and on the Nursing Homes Bill [Lords], which are consolidation measures.
WEDNESDAY, 18TH JUNE—Remaining stages of the Sex Discrimination Bill.
THURSDAY, 19TH JUNE—Second Reading of the Criminal Jurisdiction Bill [Lords] and of the Safety of Sports Grounds Bill [Lords].
FRIDAY, 20TH JUNE—Second Reading of the Children Bill [Lords].
MONDAY, 23RD JUNE—Supply [20th Allotted Day]: subject for debate to be announced later.

Mrs. Thatcher: Is the Leader of the House aware that Standing Committee E considering the Industry Bill was suspended today for the second day running? Will he tell us whether the Government are conducting a review of that Bill and are including the TUC and the CBI in that review? Will he confirm that the Prime Minister's promise to the hon Member for Nuneaton (Mr. Huckfield), that the Bill would follow exactly the provisions of the White Paper, still stands? What are the Government's plans about the future of the Bill?

Mr. Short: On the first part of the right hon. Lady's question, if it is in order to answer it, I am sure that the Committee will be meeting again later this afternoon at 4.30 [Interruption.] We shall wait and see. It broke up this morning, but I am sure that it will meet again at 4.30.
I replied to the last part of the right hon. Lady's question in the debate on the Adjournment for the Whitsun Recess.

Dr. J. Dickson Mabon: In view of uncertainty about the Aircraft and Shipbuilding Industries Bill, will the Lord President tell us what time is likely to be made for it, because there is great worry ill the industry about investment programmes in both the public and the private sectors? I know that my right hon. Friend shares that concern, but can he give us an indication of what the Government intend to do?

Mr. Short: I understand that concern. The Bill was published to remove the uncertainty. We shall certainly deal with it as quickly as we can.

Mr. Teddy Taylor: Will the Leader of the House ask the Secretary of State for Employment to make a statement early next week about the threatened rail strike, which could cause so much damage to the economy and inconvenience to the public? Will he also ask the Secretary of State for Trade to make a statement on the Government's plans which appear to be threatening the future of British Caledonian?

Mr. Short: I will certainly pass on those two points to the appropriate Ministers. However, the first is a matter between British Rail and the union.

Mr. Jim Marshall: May I draw my right hon. Friend's attention to Early-Day Motion No. 523 signed by myself and 45 other hon. Members, again drawing to the atttention of the House the serious difficulties facing the textile industry?

[That this House concerned with the serious crisis facing the UK textile and footwear industries which has led to widespread redundancies and short-time working, urges Mr. Chancellor of the Exchequer to stimulate demand for UK textile and footwear goods by zero-rating for VAT purposes all UK produced knitted goods, clothing, all household textiles and all UK produced footwear.]

May I also bring to the attention of my right hon. Friend the latest unemployment statistics issued by the Department of Employment, which show that in the period December 1974 to March 1975 there was an employment decline of 6 per cent. in hosiery and knitting compared


with 2·4 per cent. in the rest of manufacturing industry? In view of the Early-Day Motion and the latest statistics, will he again arrange for an early debate on the hosiery and knitting industry in particular and on the textile industry in general?

Mr. Short: I understand and share my hon. Friend's concern about this matter. It was for that reason that immediately before the recess, the Prime Minister announced the help that the Government intended to give. The plans and discussions on how that is to be done are continuing with all haste.

Mr. Grimond: Will the Leader of the House confirm that time will be found for the customary debate on the Floor of the House concerning the Scottish economy before we rise for the Summer Recess?

Mr. Short: Yes, Sir. I very much hope so.

Mr. Raphael Tuck: Will my right hon. Friend arrange for the Secretary of State for Foreign and Commonwealth Affairs to make a statement on the Government's intentions regarding the unfortunate individual who has been sentenced to death in Uganda?

Mr. Short: My right hon. Friend the Foreign Secretary and the whole of the Government are viewing this matter with grave concern, and the Foreign Secretary is doing all that he can to help. I am sure that the House would not wish me to say any more than that at this moment.

Mr. Tebbit: Could the right hon. Gentleman say whether we are to have a White Paper next week on the dilution of the Industry Bill or shall we have to wait a little longer for it? It would be helpful to everybody, including his hon. Friends, to know just how far the White Paper will take us.

Mr. Short: I am sure that my right hon. Friend the new Secretary of State for Industry will make a statement on this matter when he is able to do so. Indeed, I understand that he has already said something about this in the Committee this morning. He said something about it before Members of the Committee walked out. If the hon. Gentle-

man will look at the report of the proceedings he will see exactly what was said.

Mr. Terry Walker: In view of the crisis that exists in the British footwear manufacturing industry, may I once again ask my right hon. Friend to consider a debate on the Floor of the House? We have not yet had a debate about this very great subject which is worrying many of my constituents. May we have it next week?

Mr. Short: I am sorry, but I cannot promise a debate next wek. This is in the same category as textiles, of course, and what I said previously about textiles applies equally to this matter.

Mr. Wigley: In view of the confusion on the Industry Bill and certain steps that have been taken in another place regarding the Scottish Development Agency Bill, can the Leader of the House give some indication when we are to have Welsh Development Agency and Scottish Development Agency Bills?

Mr. Short: I cannot give a date today. I am answering only on the business for next week. But it will be very shortly.

Mr. Rippon: Will the Leader of the House make arrangements for an early statement in this House regarding the Government's proposals for dealing with all outstanding matters in connection with the Poulson bankruptcy proceedings?

Mr. Short: I believe the right hon. Gentleman has had a Question down to the Prime Minister today on this, and I have nothing to add on that.

Mr. Dalyell: Are we to have a White Paper on devolution?

Mr. Short: I answered this question about 20 times to my hon. Friend. I do not yet know whether we would think it worth while to have a White Paper in the autumn, but if we did, certainly we should have one, but I will not commit myself to one at this stage.

Mr. Lawson: In view of the speech yesterday by the Paymaster-General, in which he stressed the crucial importance of public expenditure, when is the Leader of the House to give us a day for the customary debate on the Public Expenditure White Paper?

Mr. Short: There will be opportunities for debates on the economy. I doubt whether that White Paper would now represent an adequate basis for a debate, but certainly there will be opportunities for debating economic matters.

Mr. Edward Lyons: Could my right hon. Friend tell us when there will be an announcement putting clothing on the bare bones of the statement by the Prime Minister before the recess on the textile industry, which urgently awaits proposals?

Mr. Short: I said a moment ago that we were considering this urgently, and a statement will be made at the earliest possible moment. Policy has been decided, and it is now a matter of the details of how it should be worked out. Certainly, there will be a statement at the earliest possible moment.

Mr. du Cann: Is the Leader of the House aware that the volume of legislation is now so heavy that other important business of hon. Members is being seriously disrupted? Standing Orders provide that meetings of Standing Committees take precedence over other affairs, and, there being the unprecedented number of five Standing Committees sitting this afternoon, this must make great difficulty for hon. Members attending to their ordinary duties. For example, meetings of traditional and significant groups on both sides of the House, such as the Parliamentary Labour Party and the 1922 Committee, are held up or suffer interruption. Will the right hon. Gentleman be good enough to look into this matter and will he pay attention to the fact that it is causing great resentment all over the House? Will he please see that we are not interrupted in this way again?

Mr. Short: I very much regret this. These two Committees—the 1922 Committee and the Parliamentary Labour Party—are, I agree, extremely important parts of the machinery of this Parliament. I believe that the 1922 Committee has been displaced today for the first time. The Parliamentary Labour Party is displaced quite frequently, I might say. However, I do not think that either of these problems should be left in this situation. My right hon. Friend the Chief Whip and I are looking into this and hope to ensure that as far as possible it does

not happen again. Today's unfortunate coincidence probably will not recur.

Mr. Skinner: Would my right hon. Friend—[HON. MEMBERS: "Order."] This is a silly place at times. Would my right hon. Friend convey to the Prime Minister, on the question of the Poulson inquiries and on the point made by the right hon. and learned Member for Hex-ham (Mr. Rippon) about a tribunal being set up under the 1921 Act, that he should bear in mind that some hon. Members—certainly many on this side of the House—and thousands and perhaps millions outside would not look very kindly on a tribunal being set up merely with a view to moralising about what has happened with regard to Poulson without any further proceedings being taken? Will he insist that if we are to have a tribunal of any kind, he will make it abundantly clear that any further outstanding proceedings must be carried on relentlessly, right to the very end?

Mr. Short: I am sure I agree entirely with the last part of what my hon. Friend has said, but the Prime Minister answered a Question by the right hon. and learned Member for Hexham (Mr. Ripon) today. It was a Written Question and no doubt my hon. Friend will read the answer.

Mr. Clegg: Is the Leader of the House aware that I listened with great interest to his broadcast about the future proceedings of the House in which he said that we would have enabling Bills setting up a skeleton of legislation and that thereafter the rest of the details could be settled? Is he aware that such a Bill already exists in Standing Committee G, the Community Land Bill? Is he further aware that this Bill has been condemned by Justice as unconstitutional and would he please spend next week in Committee seeing what a shambles it is?

Mr. Short: In that broadcast I was merely commenting on long-term aspects of how I saw Parliament developing in the future. This trend has been going on for a very long time. Modern government is becoming so complex that Parliament has been forced to legislate much more on principle. I said that, providing there is adequate machinery for scrutiny of executive acts, this was acceptable. [Interruption.] [An HON. MEMBER: "It is not."] That may be, but I was expressing my


point of the view and the hon. Gentleman can express his. We can debate the future way in which our Parliament is to develop and the way we see it. I was expressing a personal point of view, and I shall continue to do so.

Mr. Torney: Did my right hon. Friend read in yesterday's Daily Express an article by Chapman Pincher dealing with the new boss of MI5 and MI6? In view of the statement in that article of the similarity with the Russian KGB, will he comment on the article and arrange for a debate on this subject in this House?

Mr. Short: I read the article. I understand that it was lifted out of that scurrilous and mendacious journal called Private Eye. I am very glad to say that the Chapman Pincher article was wrong in every respect.

Mr. Peyton: I wonder whether I could take the right hon. Gentleman back to the point about a debate on public expenditure raised by my hon. Friend the Member for Blaby (Mr. Lawson). He will recall his commitment to give us time to debate the White Paper. I believe that that is a bit old now but a debate on public expenditure remains urgently necessary. May I also put a point on the Industry Bill, that in the not impossible event of his right hon. Friend not being exactly clear about the Government's intentions, would he please arrange for a statement on the Floor of the House next week so that the question whether we are to have a White Paper will be cleared up?
Lastly, may I say to the right hon. Gentleman that having the debate on the remaining stages of the British Leyland Bill at dead of night is very unsatisfactory indeed and simply perpetuates the way the Government have handled this matter throughout. People have been condemned in a Star Chamber manner on the strength of a report that they have never seen. That is quite outrageous.

Mr. Short: Dealing with British Leyland, I agree with the right hon. Gentleman that this is not the most convenient time. However, the House has embarked on the British Leyland project—[Interruption.] The House of Commons gave it a Second Reading, and, having embarked on the project, we must proceed with it as quickly as possible. I

concede that this is not a very convenient time.
Nobody has committed us to a White Paper, but I shall certainly convey to my right hon. Friend what the right hon. Gentleman has said. What the Government are doing is the normal practice at the end of the Committee stage of a Bill. We are considering everything that has been said. I shall certainly bear in mind what the right hon. Gentleman has said.
The third point which the right hon. Gentleman raised was public expenditure. I said that certainly there will be an opportunity to debate "economic affairs" but let me now say "public expenditure". I do not think that the White Paper will now be the best basis for that.

Mr. McNamara: Is my right hon. Friend aware that Standing Committee G is making very slow progress and that the reason why it is in such a shambles is that the Conservative Opposition cannot appreciate the important concessions given to the Churches and charities? Will my right hon. Friend confirm that tomorrow either he or the Government are likely to receive Lord Boyle's report, which will be published early next week?

Mr. Short: On the first point, I cannot comment on the state of the Committee. However, my right hon. Friend the Prime Minister met the Church authorities immediately before the recess. I should like to give an assurance that we are urgently considering the impact of the Bill on the Churches.
On the second point, I cannot say whether we shall receive Lord Boyle's Report tomorrow. It will go direct to my right hon. Friend the Prime Minister. However, when we do receive it we shall consider it as urgently as possible. I understand the concern of most hon. Members about this matter.

Mr. Donald Stewart: Will the Leader of the House tell us when he will fit in the long-awaited debate on steel, because there is great anxiety in all areas of the industry and the time is long past when we should have such a debate?

Mr. Short: There was an opportunity on Monday to debate this matter. A large number of speeches were made, but certainly if it is the general wish of the House for further time to be found to


debate steel I shall be prepared to do so.

Mr. John Davies: The Leader of the House will be aware that last night between 12.15 a.m. and 1.45 a.m. the usual night shift was dealing with Community matters, considering the economic guidelines paper. Will he please expedite the debate to be held on the Procedure Committee's Report so that we can get down to serious discussion of this extremely important paper, instead of having the purely spurious debates which we have late at night at present?

Mr. Short: Certainly I shall look at the point that the right hon. Gentleman has raised.

PERSONAL STATEMENTS

Mr. Speaker: Mr. Andrew Faulds, on a point of order.

Mr. Faulds: Did you say a point of order or a business question. Mr. Speaker?

Mr. Speaker: A point of order.

Mr. Faulds: One cannot win them all, Sir.
On a point of order, Mr. Speaker. I wish to raise with you what seems to me, and I think to certain other hon. Members, to be an abuse of the conventions of the House.
I intend to make no comment whatsoever on the contents of yesterday's personal statement, since that would be totally improper. However, I had always understood that it was the convention that a Minister who resigned was allowed to make a personal statement. I had not understood that the House had consented to extend this practice to a Minister who had been fired. Had this been the case—[Interruption.] This is a more important point than some of my colleagues seem to appreciate. Had this been the case, I dread to think what the House would have had to suffer on the historic occasion when Mr. Macmillan sacked a number of his Ministers. We should probably still be listening to personal explanations and the airing of personal grievances.
Secondly, I had always understood that personal statements should contain

no words reflecting on fellow hon. Members.
Thirdly, I had always understood that a personal statement had to he cleared by you, Mr. Speaker, before it was made. On the one occasion when I thought it proper that I should make a personal statement I had to clear that statement with your predecessor before I was allowed to make it.
May I add that yesterday's statement seemed to me to be an abuse or rather another example of the abuse we are having to suffer through the broadcasting of the proceedings of the House.
I should be grateful, Mr. Speaker, if you would let me have your consideration of the Flatters I have raised.

Mr. Speaker: The hon. Member for Warley, East (Mr. Faulds) has raised three points. I do not agree for a moment, so far as it lies within my right to express an opinion, that the broadcasting of the proceedings of the House had anything to do with this matter.
On the point the hon. Gentleman raised about the difference between resignation and being fired—or whatever the word is—as he indicated, I am not without personal experience of this situation. In my view, it is a distinction without a difference.
On the serious point of the nature of a personal statement, in my view such statements vary. It is quite appropriate that in certain cases they should be submitted to Mr. Speaker and should be approved by him. However, the House would be putting too much upon Mr. Speaker if he was expected to approve the terms of a resignation statement. In that instance it must be left to the judgment of the right hon. or hon. Member concerned. In my view, the Chair should not be brought in to give an approval.
I still think that the rule is right that in all circumstances the permission of the Chair should be sought, as it was in this case, and also that in other cases, not resignation cases, not only the permission of the Chair should be sought but the terms of the statement should be approved by the Chair. The hon. Member will have to be content with that ruling.

Mr. Peyton: I am very grateful to you, Mr. Speaker, for what you have said. I should like to put one point to


you. When a personal statement is made by a Minister who has left office, for whatever reason, it is done against the background of enjoying the sympathy of the House. I cannot help feeling that it is wrong and a departure from what is desirable if, in the course of making that statement, some highly polemical and very controversial remarks are made.

Mr. John Mendelson: Come off it.

Mr. Peyton: I am much obliged for the advice of the hon. Member for Penistone (Mr. Mendelson) but I do not propose to take it.
It seems to me, in those circumstances, that there is a very grave danger of exploiting an opportunity in an unworthy fashion.

Mr. Speaker: As I have said, I think it is a matter of judgment. I have read one or two resignation statements. I should be very surprised to find that they were all totally uncontroversial.

PARLIAMENTARY PAPERS

Mr. Michael Latham: On a point of order, Mr. Speaker. I am sorry not to have given notice of this matter, but it arose only this morning. Can you advise hon. Members about the difficulties regarding parliamentary Papers?
In the Standing Committee considering the Community Land Bill we are experiencing the greatest possible difficulty as a result of a further dispute in the printing of Hansard. This morning there were very great problems. The Editor of Hansard has been most kind in allowing us to see the duplicated copies of the typed version of the notes. However, we have not got the proper Hansard. We were advised that it was not proper for us to transmit the contents to our outside advisers. This is causing very grave difficulty to hon. Members on the Committee in proceeding with their business.

Mr. Speaker: This is a matter of which I would very much have preferred to have notice, because then I would have had a chance to look into the situation and tried to help. I shall certainly look into it and see what can be done.

BUSINESS OF THE HOUSE

Motion made, and Question proposed,
That the Motion relating to Members' Interests (Declaration) (No. 2) and any amendment thereto which may be selected by Mr. Speaker may be made after the time for opposed Business, and if so made, the Questions thereon shall be put forthwith.—[Mr. Walter Harrison.]

Mr. Speaker: Before the business motion is proceeded with further I should indicate, with regard to the two motions, that it is my intention to select both amendments. Both the motions and the amendments may be discussed together. The motion now before the House would enable them to be voted upon after 10 o'clock.

Mr. Spearing: I appreciate the point you have made, Mr. Speaker, particularly in respect of the amendment of my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), because it enables it to be taken after 10 o'clock.

Mr. Speaker: Voted on after 10 o'clock.

Mr. Spearing: There is a secondary effect of a business motion of this type which I think has been drawn to the attention of the House and the Government previously and which is less desirable. This is that it would be possible, although we hope that it will not happen, for the next business, on this occasion the Social Security Pensions Bill Report stage and Third Reading, to last much longer than expected. If it finishes at around 7 p.m.. which I understand is the desire, we shall have three hours to discuss the important business of Members' interests, but if it does not, or if on a future occasion the previous business lasts longer than expected, the amount of time available for the second business will be correspondingly reduced.
It is conceivable, although I think improbable, for the Social Security Pensions Bill to take us within an hour or even half an hour of 10 o'clock, and therefore we should have only that amount of time to deal with the motion and amendments on Members' interests.
Therefore, Mr. Speaker, I ask through you whether the Government will undertake that if the business on Members' interests is not started before 7.30 p.m.,


they will consider adjourning it at 10 o'clock so that it can be taken later if more hon. Members wish to speak.

Mr. Speaker: I think that the Chair comes into this. It is for me to allow a motion to adjourn a debate. The Government cannot put such a motion without my permission. We must see how we go. I have no doubt that the matter will be considered in a reasonable light. I think that it is the desire of the whole House that the two motions and the amendments should be properly debated. We shall deal with the situation that the hon. Gentleman described if we come to it.

Question put and agreed to

Orders of the Day — SOCIAL SECURITY PENSIONS BILL

As amended (in the Standing Committee and on Re-committal), further considered.

Orders of the Day — Clause 33

ANNUAL RATE OF EARNER'S PENSION

4.3 p.m.

Mr. R. A. McCrindle: I beg to move Amendment No. 22, in page 22, line 34 at end insert—
'(8) In the case only of a scheme certified by the Occupational Pensions Board to be an industry-wide scheme for earners employed by more than one employer in the same field of industry the rules of the scheme may provide, as an alternative to the other provisions of this section, for determining pensions by reference to the earner's average salary revalued where, in the opinion of the Occupational Pensions Board, the benefits of the scheme, taken as a whole, are likely to be more favourable to most earners than would be the case if the rules of the scheme were in accordance with subsection (2) of this section'.
This is a modest amendment aimed at achieving the maximum number of occupational pension schemes without sacrificing the high standards which the Government understandably wish to achieve. It is a recognition of the fact that in some cases the basic requirements for an earner's pension as laid down in the clause would be close to impossible of achievement.
We have in mind an industry such as the building industry, where there is considerable mobility, and where there are many small firms which on their own could probably not sustain an occupational pension scheme. I do not in the least quarrel with the Government over the high standards which they have laid down in the Bill as the test of good pension schemes. I can see that they do not wish to have the contracting out requirements watered down beyond a certain level. We are with the Minister in that aim.
I am talking of a narrow range of schemes where transfer of pension should be facilitated, because transfer of employer within the same industry is very much the order of the day; where some


small employers have no more than five or 10 people on their staff; and where small employers abound. The small employer is understandably put off an occupational pension scheme by the thought of the administrative work involved. Anyone who has had anything to do with the administration of a private pension scheme within an organisation of any size will have sympathy with that view. We believe that this fear of the administration involved in a small scheme can be relieved by the participation of the employer in an industry wide scheme. Therefore, by the amendment we wish to encourage the development of such industry wide schemes.
It may be asked why such schemes cannot be fitted into the contracted-out requirements laid down by the Bill. There are a number of reasons, some of which I shall put briefly. A large employer could accept the need for cross-subsidy between employees of different ages, but with different employers that is not easy. An employer with young employees would be asked to subsidise companies with older employees, so that there would be an additional barrier to the acceptance of good pension schemes and all that that means for the employees. Whilst endorsing the Government's approach, which is that there should be high standards for schemes, the amendment asks the Government in turn to accept that in some industries it would be almost impossible to achieve them.
It would be a tragedy if an over-rigid attitude by the Government prevented many people from joining a scheme which in most other respects is perfectly satisfactory. The Government should be with us in this attempt to increase the number of people in occupational pension schemes.
The Government's fear is that acceptance of the amendment would mean lowering standards and encouraging the development of schemes such as past schemes of which few of us can be particularly proud. The Government probably see, as we do, that there are still many people who, even if the amendment is accepted, will never be in an occupational pension scheme. I think particularly of the catering industry, where men flit from hotel to hotel or restaurant to restaurant, and in and out of the industry.

For those people, the opportunity to become a member of an occupational pension scheme is probably not even a starter, even though some of them may spend most of their lives in the same industry.
The building industry, upon which I focus particular attention, is different. It may be possible to include many industries ancillary to building under the aegis of one body in such a scheme. This would mean that we should be opening the opportunity of membership of occupational pension schemes to about a million people, as far as I can estimate. The Government will have to have strong reasons for refusing the amendment, if they mean what they say about encouraging the development of occupational schemes, because the difference between being able to bring up to a million people into an occupational pension scheme and not being able to do so is considerable.
In summary, I put the amendment forward for the following reasons. The first is that, without unduly diluting the Government's requirements for pension provision, encouragement should be given to industry-wide schemes whose common denominator will often be an employers' federation or the like. Secondly, it would be an encouragement to the mobility of labour, and in those industries where mobility of labour is already the norm, it would ensure the continuity of pension arrangements. Thirdly, failure to accept the amendment would prevent many people from becoming members of an occupational pension scheme.
Remembering the good will between both sides in the earlier stages of our consideration of the Bill, I hope that the Government will be able to accept this modest amendment.

Mr. Paul Dean: I support my hon. Friend's amendment. In Committee, I moved an amendment designed to achieve the same objective and withdrew it following an undertaking by the Minister of State to consider what had been said and to try to find ways in which centralised and multi-employer schemes would be able to contract out.
I think the whole House is grateful to the right hon. Gentleman for the study he has given to the problems which these scemes face under the Bill, and also for considering the detailed proposals which


I have put to him. I believe that these schemes have a big job to do in the future and that they will grow in importance and in extent. They would have been encouraged by special arrangements made under the 1973 Act but there is not similar encouragement by similar special arrangements in this Bill.
Why are these schemes important? My hon. Friend has referred to this and I agree very much with what he says. Perhaps I can give two examples of the most obvious types of areas where they are important. The first is the situation where there is a big turnover of labour between firms in one industry. Building and construction is the most obvious example. In cases of this kind the centralised scheme covering one industry can do much to solve the otherwise daunting problems of transferability or preservation of pension rights which might in such circumstances deter employers from introducing schemes or continuing schemes they have already. This is the first and most obvious area where the centralised scheme lends itself to the conditions of the industry and solves problems which would otherwise be very acute.
The second area is that of the small employer who, in many cases, will wish to provide benefits of occupational pension schemes but finds it difficult to do so on his own. The umbrella of a centralised scheme covering one industry, or where there is a common factor such as membership of a chamber of commerce, can be the only effective way in which that small employer can provide his employees with the benefits of an occupational scheme.
If these and other areas are to be covered successfully by these types of multi-employer schemes, it is essential that they are able to fulfil three criteria. The first is that they must be simple. If they are not simple, the employer concerned is likely to feel that he cannot embark on the obligations which are likely to be involved. Secondly, the financial obligation must be measurable and not open ended. Thirdly, they must avoid cross-subsidies between participating members, many of whom will be in direct competition with each other.
On those three criteria, the final salary formula, which is the basic formula in

this Bill, is ruled out. They cannot hope to maintain those characteristics of the final salary formula. The most suitable formula would be, I believe, a contribution test.
I think it would be wrong to rule out a scheme, such as, for example, the Merchant Navy scheme, which has a contribution of 15 per cent., just because it does not fit in with the tidy framework laid down in the Bill. The fact is that a scheme with a contribution of that level going into it is almost bound in any circumstances to be able to meet, and more than meet, the levels of pension laid down in the Bill. It would be very wrong to exclude these schemes because they do not happen to fit.
I hope that the Minister of State, having reconsidered this matter, will be able to see his way to providing for a contribution test. If he cannot see his way this far—I understand the difficulties, because we have discussed this in some detail—then there are, I believe, two other possibilities. One is the "average salary revalued" formula, which may be—I do not think it is—a way round the difficulty. The second is the fixed contribution, with some means of the employer meeting any shortfall that there may be. These are two other possible routes, though not as satisfactory as the other. If the Minister of State has rejected the contribution test proposal, which I still favour, I hope he will at least assure us that he will see that is no obstacle in the Bill as it stands at present to these two possible routes.
I hope he will also agree—as he has said that he will—to look at a model scheme to ensure that these types of multi-employer arrangements are not excluded for insubstantial reasons.
I therefore support my hon. Friend. I hope that the Minister of State will be able to go as far as we desire. If he cannot do that, I hope he will back up the expression of support for these schemes which he gave in Committee by assuring the House either that there are no obstacles in schemes on the lines I have mentioned, or, if there are obstacles, that he will ensure that the necessary amendments to the Bill are introduced in another place.

4.15 p.m.

The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley): I am very grateful to the Opposition for moving this amendment. I gave an assurance during the Committee stages of the Bill that I would consider in detail the whole question—and it is a difficult question—of centralised schemes and of multi-employer schemes. Since the Committee stage I have made such a detailed investigation and I should like to report my conclusions.
First, I should make it clear that there is no difference between my attitude, the Government attitude and the attitude of the Opposition, expressed by the hon. Members for Brentwood and Ongar (Mr. McCrindle) and for Somerset, North (Mr. Paul Dean), in the comments they have made this afternoon setting out their belief that it is important that employees should be able to be members of good occupational pension schemes. One does not want to see a situation in which, because a man or a woman works for a small employer, or in an industry with a very high degree of labour mobility—for example, the building industry referred to by both hon. Gentlemen in their speeches a few moments ago—there is exclusion from good occupational pension provision because of the peculiar circumstances of employment.
The hon. Gentleman referred to the Merchant Navy officers' scheme. It is my understanding, as it is his, that that scheme, which is a money purchase scheme, has a total level of contribution amounting to 15 per cent. With a level of contribution of that kind, one can expect, even within the limitations of a money purchase scheme—I have never hidden my views about the desirability or otherwise of money purchase schemes and the difficulties inherent in them—a respectable level of benefits. Therefore, in the concluding stages of a succession of debates before the Bill goes to another place, we must first attempt to ensure that any arrangements we make do not hinder the membership of occupational pension schemes by employees in the type of employment I have described.
I have made it clear from the outset—in a Press notice of a speech I made some months ago and in all the discussions that I have had and comments I have made in Committee and elsewhere

that I do not think there is any major future, certainly not within the contracting-out arrangements in the Bill, for money-purchase schemes. I advised hon. Members and organisations that the very mention of a scheme based on money-purchase principles could not be expected to produce a favourable reaction from trade unionists and employees generally.
The basic difficulty about money purchase is that by its nature it does not give a guarantee that it will meet inflation. The White Paper on which this legislation is based described a better pension as being one guaranteed against inflation. While the Government do not wish to hinder the development of occupational pension provisions for men and women, I have made it clear that I could not accept pure money-purchase principles.
There has been a genuine attempt at reconciliation on this matter. It was said first of all that there was no possibility of what I have always feared—that if we allowed money-purchase type provision in multi-employer schemes we would be driven to open wide the gates for such schemes for the generality of employers. Assurances have been given to me on that point, in Committee and by outside organisations, for which I am grateful. Propositions were put to me during my consultations aimed at guaranteeing the guaranteed minimum pension, thus meeting one of the two contracting-out conditions. Since the end of the Committee stage I have been engaged not only in a detailed departmental examination of this but in discussions with outside individuals to see whether we can go any further.
I have tried to see whether we could allow employees in the types of employment concerned to be in good occupational pension schemes recognised for contracting-out purposes and meeting the two contracting-out conditions. This has always been the difficulty. I understand that it is for this reason that this amendment has been put forward. Conservative Members will say that if this amendment was written into the legislation there would be a guarantee that every individual would receive a pension which met the two conditions. They would say that it would be expected that contributions would be set at such a level that in the generality of cases people would get a pension which would comply with


the two conditions. Factors such as investment yield, inflation patterns and the relationship between the investment curve and wage and salary movements would be involved.
I cannot accept the amendment because it would not mean that the two conditions were met. Since we last discussed these matters there have been a number of developments. I said that I thought that this was my FSSU. Hon. Members will remember that that issue was not settled when the 1973 Act ended its Committee stage. Indeed, a party was held only yesterday to celebrate the reorganisation of that scheme. We are moving into a situation when there can be a settlement of this issue, when there can be guarantees to the individual employees that the contracting-out conditions can be met. We are reaching the point when it will be possible for multi-employer and centralised schemes to be set up and recognised for contracting-out purposes by the Occupational Pensions Board.
I must first deal with a detail. In Committee the hon. Member for Somerset, North moved an amendment dealing with the treatment of a number of separate schemes operated by a group of associated employers as one scheme for the purposes of contracting out. The amendment was to meet the desire of the CBI that a parent or holding company of a group of associated companies should be able to make elections in respect of each scheme operated by the group and to operate the subsequent procedure for notification of termination on behalf of subsidiary companies. I undertook to look at this.
It is the considered view of my Department that on the basis that the schemes operated by the group would be multi-employer schemes, the wishes of the CBI can be met by using the powers in Schedule 2 (7). Provided that a centralised scheme meets both contracting-out conditions, the Government are ready to make changes in the structure of the administrative arrangements for contracting out to facilitate the contracting out of those schemes.
I turn now to what I see as being the way forward. The hon. Member for Somerset, North mentioned the prospect of average salary revalued. I understand

the problem of cross-subsidisation, particularly in fiercely competitive industries. Nevertheless, it may well be that this is a way forward in some of the types of employment with which we are here concerned. I refer the hon. Gentleman to an article written by a Mr. John Sparks in The Times on 21st May in which he set out what he believed to be a broad basis for such schemes whereby there could be reserve arrangements, avoiding the difficulties and pitfalls that have been discussed in so much detail recently.
We have there all the indications of the ingenuity of the pensions industry to devise arrangements. As it has said that it could meet the second contracting-out condition, I am extremely hopeful that it can also meet the first one without having final salary type arrangements written into the funding of the schemes.
What is in a name? The Occupational Pensions Board is concerned with solvency and whether pensions will be payable at a certain level. If there was an existing money-purchase scheme, all the benefits before the inception of the new scheme would be on the old-established basis and it would be only slowly, over a number of years, that a new pattern would begin to emerge in respect of the post-1977–78 period. Even now I am awaiting receipt of a model scheme from a large and influential group in the pensions industry.
4.30 p.m.
I am hopeful that with the customary ingenuity of the pensions industry it will overcome not only the second but also the first contracting-out condition. Therefore, I advise the House that although I cannot accept the amendment because it does not meet the two contracting-out conditions, on the basis of the discussions and thought given to this subject so far there is no need to amend the Bill to meet the needs of the multi-employer and the centralised schemes.
The type of arrangements that I have described in reply to the amendment tabled by the hon. Member for Brentwood and Ongar will assist. However, the Occupational Pensions Board would be able to accept multi-employer and centralised schemes on the basis which is now emerging not only in the article by Mr. Sparks published in The Times of 21st May but also on the basis of the


type of model schemes which I expect to receive in the near future from important and influential pensions organisations in this country.

Mr. McCrindle: I was heartened to hear the Minister tell the House that he had no wish to exclude anyone who, by the application of a reasonable pensions scheme, could be brought within the orbit of private pensions provisions. He spoke, quite fairly, about the difficulty that exists of complying with both the contracting-out conditions in schemes of the type about which we have been talking under the amendment. This is the heart of the difficulty with which we are faced and the reason why the Opposition felt that they had to put forward the amendment this afternoon.
The Minister spoke about the money purchase schemes and the almost emotional objection which is felt in some quarters to the provision of those schemes. I understand that, although I do not go quite as far as the Minister in my objections to them. When I put forward the amendment I had no wish to suggest that we should be turning the clock back. As the Minister believes that money purchase schemes would, by and large, be doing just that, I can quite understand that he wants to lay down conditions so that as many people as possible can be covered by them, but that they can be guaranteed the return on their contributions which the people in large occupational pension schemes can reasonably hope to enjoy.
The Minister did not quite answer the point made by my hon. Friend the Member for Somerset, North (Mr. Dean) when he said that any arrangements made to accommodate the type of schemes we are talking about would, first, have to be simple, secondly, have to have the financial obligations measurable and, thirdly, have to take into account the fact that cross-subsidisation was difficult. I do not want to press him particularly on that, but as he went on to say, fairly and favourably, that without the acceptance of the amendment our objective could be achieved, I hove that he can—also by simplicity—tell us that he has understood what my hon. Friend was saying and that that triple requirement, plus anything else, might well, without amending the Bill, be

built into the type of scheme about which we are talking.

Mr. O'Malley: I entirely agree with the hon. Gentleman about the merits of simplicity. The difficulty is always that we cannot allow simplicity to become an enemy of equity. However, it will be possible, on the evidence that is coming forward, to devise schemes for which there can be a money purchase basis but in which the final salary level of provision is guaranteed. This is a matter of funding, and we should not call them money purchase schemes at all in future because the nature of the animal has changed. They have become inflation-proofed and it would be to the detriment of the development of good centralised schemes if we were to use that terminology.

Mr. McCrindle: I understand perfectly what the Minister says. It was useful that he intervened to place on record that he understands the need for simplicity. I, in turn, must concede that I understand the difficulty of achieving simplicity. If anyone had listened to our deliberations yesterday evening, "simplicity" is about the last word they would have employed in describing them. Nevertheless, to aim at the greatest possible degree of simplicity is something that does not divide the Minister and myself; on the contrary, it unites us.
The Minister said that he could not accept the amendment, and, by implication, did not agree that the amendment was necessary. For the purpose of arranging the debate we felt that it was wise to table the amendment.
If, instead of accepting our amendment, the Minister is asking us to accept his good faith, that he wants the same as we do but that it may have to be achieved in a different way from that outlined in the amendment, I have no objection.

Mr. O'Malley: That is precisely what I want to achieve.

Mr. McCrindle: On that basis it would be uncharitable if we were to continue to press the amendment any further. It would be churlish indeed if I were to suggest that we should press it any further.
Before officially asking leave to withdraw the amendment, I would like to point out that the Minister completed his


remarks with a challenge to the pensions industry. Not for the first time has he shown a high degree of faith in one of the bastions of private enterprise. It has warmed the hearts of many of the strong supporters of private enterprise in Standing Committee A that he did so during the Committee's proceedings.
The Minister was absolutely right to say that he wanted to have the maximum number of people brought within occupational pension schemes. That is what we have said since the introduction of the Bill and that continues to be our purpose. We want to include in occupational pension schemes many of those in industries in which at present it is difficult to achieve such schemes. However, if we accept from the Government that there are difficulties in achieving that, it is partly up to the occupational pensions industry to find an acceptable formula. I do not believe that the pensions industry will be found wanting. It will continue to pursue the challenge given to it by the Minister this afternoon.
In all these circumstances the outcome of the amendment is distinctly favourable. We know that the Government, the Opposition and the private pensions industry are all on the same side and are pressing for the same thing. Therefore, Mr. Deputy Speaker, I do not wish to pursue Amendment No. 22.

Mr. Deputy Speaker (Mr. George Thomas): Is the hon. Gentleman asking for leave to withdraw it?

Mr. McCrindle: I am indeed. I beg to ask leave to withdraw the amendment.

Amendment by leave withdrawn.

Orders of the Day — Clause 34

EARNER'S GUARANTEED MINIMUM

Sir George Young: I beg to move Amendment No. 23, in page 23, line 32, leave out '1/8th' and insert '1/7th'.

Mr. Deputy Speaker: With this amendment it may be convenient to take the following amendments:

No. 24, in page 23, line 32, leave out '1/8th' and insert '1/6th'.

No. 41, in Schedule 1, in page 52, line 6, leave out 'eight' and insert 'seven'.

No. 27, in page 52, line 18, leave out '1/8th' and insert '1/7th'.

No. 28, in page 52, line 18, leave out '1/8th' and insert '1/6th'

No. 42, in page 53, line 13, leave out 'half'.

No. 43, in page 53, line 26, leave out 'half'.

Sir George Young: Amendment No. 23 bears a close resemblance to Amendment No. 15, which I moved in Committee. These two amendments seek to give a fairer deal to those like yourself, Mr. Deputy Speaker, who continue to work beyond retirement age.
I remind the Minister that in Committee I was supported by two of his hon. Friends, the hon. Member for Edmonton (Mr. Graham) and the hon. Member for Walsall, South (Mr. George), both of whom spoke in favour of the amendment.
The hon. Member for Edmonton said,
If the amendment cannot be accepted, I hope that he "—
that is, the Minister—
can come back at a later stage and say something helpful to a great many people who are already encouraged to continue working.
This is the latest stage at which the Minister can come back. Both the hon. Member for Edmonton and I look forward to his saying something helpful. In the same debate the hon. Member for Walsall, South also expressed the hope that
…the Minister will be forthcoming on that score."—[Official Report, Standing Committee A, 24th April 1975; c. 290–1.]
It is a matter of concern that the Labour back benchers are not only empty of talent but are also, on an important matter such as this about the future of retirement pensions, empty.
The argument is essentially simple. At the age of 65 a man can either claim a retirement pension or he can carry on working. If he chooses the latter, he forgoes his pension until such time as he does retire. By so doing, he saves the Government a considerable amount of money and, in recognition of this, he receives a deferred increment. In the Bill, as it now stands, for every week he carries on working beyond retirement age, his pension is increased by one-eighth of 1 per cent. In the case of a single man,


this works out at a rate of return of 6½ per cent. before tax on his investment in his pension. I believe that that rate is far too low, and I seek to raise it by these amendments to 7½ per cent. This is done by increasing the rate of accrual from one-eighth to one-seventh. One-seventh per cent. still represents a very good bargain for the Treasury, and the rate of accrual would have to rise to one fifth per cent. if it was to be actuarially fair.
These sums may sound very small, but if one takes an example and looks at the global sums of money involved, one finds that the sums are in fact quite large. A single man aged 65—this may be of interest to you, Mr. Deputy Speaker—has a life expectancy of 13·94 years and, if he has an earnings record of £40 per week, his pension entitlement is £18·70. If he decided to retire at the age of 65, he would therefore draw £18·70 for 13·94 years, and this comes to £13,555·26. Alternatively, he could work for a further five years and retire at the age of 70.
For each week that he works under the Bill as it stands, he would add one eight hundredth of his weekly pension entitlement of £18·70. At the end of his five years, he has earned himself an extra £6·08 per week by virtue of deferring his retirement. He is then entitled to £18·70 plus £6·08 per week for the remaining 8·9 years of his life, which comes to £11,519·73. This is £2,035·53 less than what he would have received had he retired at the age of 65.
The Government are, therefore, doing very well out of those who continue to work. While this may be a financial bargain from the Treasury's point of view, it is a shameful swindle on elderly people, many of whom are unable to calculate the real rate of return on their savings, and, I suspect, do not realise what a bad bargain they are getting.
The case for accepting my amendment is now even stronger than it was when I first moved it on 24th April. In the meantime, the Government have introduced an inflation-proofed savings scheme for those over retirement age. A man of 65 who retires and perhaps receives a lump sum on retirement can now invest that lump sum and receive a return equivalent to the going rate of inflation, currently over 20 per cent. But the man who continues to

work, and whose savings before retirement remain locked up, gets much worse treatment, as his savings accrue only at 6½ per cent.
This distinctive treatment between those who live off unearned income and those who continue to earn seems wholly alien to the Government's general philosophy, and I do not see how they can reconcile this penal treatment of those who continue to work with their consciences.
This is not an expensive amendment. In the Minister's own words:
The cost in global terms is small… It is estimated that it would reach £1 million a year after five years and £5 million after 30 years, so we are not talking about enormously increased expenditure."—[OFFICIAL REPORT, Standing Committee A; 24th April 1975, c. 292].
In fact, it is wholly wrong to look at this amendment in these terms. The reality of the present situation is that the Government are borrowing money from those over retirement age at 6 per cent. whereas the going rate at which the Government are borrowing from the rest of the community is nearly twice that amount.
The Government are therefore discriminating against those over retirement age who seek to carry on working, and there are no social reasons whatsoever for this discriminatory treatment. The Government have in fact succeeded in reversing the parable of the talents. The servant that hides his talent in the earth—or puts it into the Government's equivalent, the index-linked national savings scheme—does very well. The servant that goes and trades and makes five more talents—by carrying on working—does very badly.
Whereas in the parable the unprofitable servant has his talents confiscated and is cast into outer darkness, the Government have reserved this penalty for the profitable servant, whose retirement pension is, in real terms, confiscated. The bit of the parable which remains unchanged is the nature of the employer who was, if my memory serves me right, a very hard man.
This amendment, therefore, has all-party support. It involves a very small amount of public expenditure, and it gives the Government the opportunity of stopping what is in effect a shameful theft of the savings of elderly people. I very much hope that the Minister will announce that he accepts this amendment this evening, particularly in the light


of comments made by the Minister of State on a similar amendment to the Social Security Benefits Bill on 16th January this year, when he promised that he would take a detailed view on this matter and consider fully the representations which have been made.
4.45 p.m.
Amendments Nos. 24 and 28 were to have been moved by the hon. Member for Cannock (Mr. Roberts), who I notice is not present in the Chamber. Those amendments would have outbid my very modest amendments by raising to one-sixth the rate of accrual. The hon. Member for Cannock clearly shares the strong feelings of Opposition Members on this matter. I hope that it is not pressure on him by the Government which has prevented his attendance at this debate. Perhaps the Government could compromise between the one-eighth in the Bill at present and the one-sixth proposed by the hon. Member for Cannock by accepting the amendments which I have moved, which suggest one-seventh.
Amendment No. 41 is a consequential amendment which would reduce from eight weeks to seven weeks the qualifying period for the deferred increment and would prevent any complicated questions being involved in the calculations.
Coupled with those three amendments are Amendments Nos. 42 and 43, in the names of myself and my hon. Friends. These amendments closely resemble the Amendment No. 89, which I moved in Committee—and I promise not to quote the Bible in support of my case this time. This section of the Bill makes provision for the surviving spouse who outlives his or her partner, and where the partner is in the process of building up a deferred increment to the pension. As the Bill stands, the surviving spouse gets only one half of the deferred increment.
This provision is wholly contrary to one of the major principles in the Bill, namely that a surviving spouse can inherit the full pension rights. On Second Reading the right hon. Lady the Secretary of State drew attention to this principle as follows:
Moreover, when a widow retires or if she is widowed after pension age she will be able to draw any additional component which she has earned in her own right as well as the basic and additional components which she has

inherited from her husband."—[Official Report, 18th March 1975; Vol. 888, c. 1493.]
So far as deferred increments are concerned, it simply is not the case that a widow inherits the total entitlement from her husband, and it does seem odd that this anomaly remains in the Bill.
Also, as it stands, Schedule 1 is inconsistent with Clause 7. Clause 7 provides that a widow's retirement pension shall be computed in exactly the same way as her husband's pension was computed, and this very welcome feature has not been carried through to the schedule. Further, the schedule is inconsistent with what is said in the foreword of "Better Pensions", which says
the widow may inherit 100 per cent. of her husband's pension entitlement
and further,
the older widower and the widower who has had to be supported by his wife because of prolonged sickness can inherit her pension rights.
The reduction of one-half is not consistent with either of those two statements.
Again, this is not an expensive amendment. According to the Under-Secretary, some £5 million would be added to the cost of the scheme after 15 years. This is not a large sum, and it is worth paying to ensure consistency throughout the Bill. It will enable many widows to be taken off supplementary benefits, and I am sure that the Minister would welcome that particular consequence. In Committee, the Under-Secretary said, quite rightly, that this one-half provision was taken from the Conservative's Act. However, that Act did not embody some of the principles I have outlined, particularly that embodied in Clause 7 of this Bill, so the same inconsistency was not involved.
The Under-Secretary conceded that this provision was not completely logical with the rest of the Bill, and in fairness to him he did not seek to defend the Bill as it stood. I suspect this time that I may be pushing at an open door. He undertook to have further thoughts in the light of other amendments tabled by members of the Committee, and I hope that in the light of those thoughts—though his mind may have been on other matters more recently—he will now announce to the House that all the amendments I have proposed may be accepted.

The Under-Secretary of State for Health and Social Security (Mr. Alec Jones): When the hon. Member for Ealing, Acton (Sir G. Young) said that he was pushing at an open door I felt that there was some element of truth in that. However, the way in which he pushed was with such a force as almost to encourage me to slap it back rather than open it even wider.
As the hon. Gentleman knows, in Committee both my right hon. Friend and I were pressed heavily on certain issues, and certainly we both gave promises that we would examine various propositions which had been put to us by the Opposition. Two such propositions are the subject of the amendments which we are now discussing: Amendments Nos. 23 and 27 and the consequential Amendment No. 41 and the twin Amendments Nos. 24 and 28 dealing with the rate of increment for deferred retirement: and then the second batch of amendments which we are taking with them, Amendments Nos. 42 and 43 concerning the level of the increment to be inherited by the widow or, in appropriate cases, the widower. Certainly we have carried out faithfully the re-examination which we promised on that occasion.
We have arrived at the conclusion that we are prepared to accept one of the propositions but, at the moment, have to ask the House to reject the other. Perhaps I ought to deal with the bad news first and then sweeten it with the good news. We ask the House to reject those amendments which seek to increase the increment from the present one-eighth per cent. per week to either the one-seventh per cent. moved by the hon. Gentleman or the one-sixth per cent. in Amendments Nos. 24 and 28. Our reason for this is threefold.
First, the benefits which these amendments would bring about would go to those pensioners who were fit enough and had the opportunity, through either place of work or place of living, to remain at work after the age of 65. We do not believe that at the moment that has the greatest priority in the improvements we ought to carry out.
Secondly, we believe that the fact that the 6½ per cent. was introduced only in April of this year, two months ago, means that the period is too short to judge its general acceptability or whether

it has any effect at all in persuading people to remain at work. The figure of 6½ per cent. was judged by the previous Government to be a reasonable one, and I am sure you will be delighted to know, Mr. Deputy Speaker, that your interests were looked after by the previous Government when they increased this to 6½ per cent.

Mr. Deputy Speaker: Order. I know that the hon. Gentleman the Member for Ealing, Acton (Sir G. Young), is very young, but he is old enough to know that he should not refer to me. The hon. Gentleman the Under-Secretary is only just behind me in age.

Mr. Alec Jones: I withdraw any accusation I might have inferred against you. Mr. Deputy Speaker.
We feel that since the 6½ per cent. was only introduced in April this year there has not been long enough to see its effect, and we think it reasonable to delay any action on this matter.
Thirdly, the hon. Gentleman said, quite rightly, that if the Government were to agree to Amendments No. 23 and 27 this would cost a matter of £1 million a year after five years, rising to some £5 million a year after 30 years. Amendments Nos. 24 and 28 would double that to £2 million after five years and £10 million after 30 years. We are not saying that these are massive sums of money, although sometimes we here talk carelessly about £10 million or £5 million and that causes me certain misgivings, but we do not believe that we can justify spending those sums at this particular time.
This is obviously not the last word on this sort of subject. This is the type of amendment which any Government can introduce at any time, and this is certainly an aspect of the scheme which the present Government will continue to keep under review.
Amendment No. 41 would only be of importance if Amendment No. 27 were carried. As I hope the House will reject Amendment No. 27. Amendment No. 41 will automatically not be useful.
Amendments Nos. 42 and 43, which resurrect the old Amendment No. 89 in Committee—and this is the good news for which the hon. Gentleman the Member for Ealing. Acton has been waiting—we are certainly prepared to accept. They


would allow a widow and in some cases a widower to inherit the increments that a late spouse had earned, since the amendments apply to that part of Schedule 1. The Government recognise that the new scheme requires a widow or widower to inherit all rather than half the pension which a late husband or wife was receiving, subject to the maximum payable to one person. This was the point my right hon. Friend the Secretary of State mentioned when she talked about the philosophy of the scheme. So I am delighted to tell the hon. Gentleman that we are quite prepared to accept his amendment. The change embodied in Amendments 42 and 43 will add some £5 million a year to the cost of the scheme after 15 years, but we feel that it is an improvement worth making and we are pleased to accept the amendment.
I think that the hon. Gentleman need not be too disappointed since his success rate in the last 15 minutes has been at least 50 per cent.

Mr. Kenneth Clarke: We are once more indebted to my hon. Friend the Member for Ealing, Acton (Sir G. Young) who I think is probably the only hon. Member of the House who can succeed in making proceedings on a measure such as the Social Security Pensions Bill somewhat entertaining and who in this case even managed to introduce a note of personal interest in the remarks he made. He makes biblical quotations which are of an uplifting quality and also gets hold of extremely valid points. The names of Members of the Conservative Front Bench are added to his amendments on both these matters because he took up two extremely good points in Committee and we have been following the case he has been making on behalf of the interests of those who defer retirement. We entirely accept the importance of what he has been urging in defending the interests of those—and there are increasing numbers—who want to work after retirement and who do work after retirement and who are entitled not only to a fair deal but to positive encouragement from the Government should they wish to do so.
In my opinion both the cases that my hon. Friend made are completely unanswerable in logic, so that there is no

need to repeat them. Therefore a 50 per cent. success rate is the least he could expect.
For my own part, I accept that one has to have a realistic attitude when one is urging amendments which cost money upon a Government at Committee stage, and I accept that there are some reasons for defending or perhaps excusing a little further delay on the question of the increments themselves. However, I hope the Minister was not intending to slam the door too firmly, because I think that my hon. Friend's arithmetic is quite incontrovertible. But it is right that as a result of the 1973 legislation the figure has just been raised, and as both sides of the House have been going on about the inadequacy of the increments for many years, we regard the present position as much more tolerable than ever before.
I accept that in making a choice the Government probably acted wisely in choosing the second of my hon. Friend's two points. As I said in Committee, it seemed that the omission which my hon. Friend discovered was an oversight on somebody's part in the planning and drafting of the Bill. I did not say that critically. Given the complexity of this Bill, the Opposition have made a great many errors in the course of choosing matters to argue upon. Nevertheless, it seems to me that there never was a case that could be made, when one compared this part of the Bill with others, for limiting a widow or a widower's entitlement to only one-half of this increment. I am glad that this is so overwhelmingly clear that it has been accepted, and I advise my hon. Friend to be patient for a year or two, because it can be a question only of time before his unanswerable logic has to be accepted by a Government and the increments brought up to a fair mathematical level.

Sir George Young: My hon. Friend the Member for Rushcliffe (Mr. Clarke) was kind enough to say that my arithmetic was quite incontrovertible. He may be right in that, but I am afraid that his arithmetic is wrong. I put forward five amendments. Two have been accepted, so that the success rate is not 50 per cent. but 40 per cent. The Under-Secretary of State made the same error.
When the Under-Secretary of State said that he would accept one set of amendments, I was a little worried, because one set is much cheaper than the other, and the cheaper set was being pressed on him by his hon. Friends. I thought that he might take the easy way out and go for the cheaper of the two sets. To his credit, he went for the more expensive set which was not being pressed on him by his hon. Friends. I know that all old-age pensioners will be grateful for that decision.
5.0 p.m.
The argument put forward by the hon. Gentleman in rejecting Amendments Nos. 23 and 27 were better than those put forward in Committee. I accept that the new rates have only just come into effect. There was an implication that after a year or two has elapsed the time might be appropriate to look again at the rates of accrual and that that might be the opportunity to review them upwards. The hon. Gentleman will have to make his peace with his hon. Friends on the Committee who spoke in favour of the amendments and his hon. Friend the Member for Cannock (Mr. Roberts) who sought to go further than I proposed.
I am delighted that Amendments Nos. 42 and 43 have been accepted and that the philosophy in the Bill has been made consistent. It would be churlish of me to press Amendments Nos. 23 and 27. As I approach old age I have an interest in the provisions they make but I have a year or two to wait. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Kenneth Clarke: I beg to move Amendment No. 25, in page 24, line 3, leave out '5' and insert '8'.

Mr. Deputy Speaker: With this amendment we may take Government Amendment No. 36.

Mr. Clarke: With this amendment we come to one of the key issues which has dominated the discussions throughout our proceedings on the Government's new pension scheme. It has been a key issue in all the attempts that have been made to reach agreement between the two sides of the House on the correct structure for pensions in the future, and in the attempt which was made in Committee to work

together to evolve a structure which allows proper continuing partnership between the State scheme and the occupational pension scheme.
Throughout, one of the major concerns has been the financial obligations that might fall upon occupational pensions schemes that were contracted out in respect of the accrued rights of early leavers from employment—those who leave an employment, and hence leave pensionable contracted-out employment, before their normal age of retirement—and there are a great number of these.
As the Government's proposals stood, the expectation appeared to be that pension funds could take on the full liability for the preserved rights of people who left pensionable employment to go to other employment before ordinary retirement age. That was an intolerable obligation to place upon employers and pension funds, given the basis of the scheme. If a man in his 40s leaves his employment, under the new arrangements he will leave with a preserved pension right. The obligation was to be left upon employers and their schemes to inflation-proof that preserved right until the man's ordinary retirement age and only after that stage would the Government take on the obligation of revaluation.
The Government agreed that that could be an unacceptable burden. In modern industry the mobility of labour is becoming increasingly high. We have not evolved an acceptable way of readily transferring rights from one scheme to another—and have certainly not evolved a way of making it an obligatory course. Some schemes would have been landed with a great burden of revaluing the preserved rights of early leavers, to the great detriment of their long-term employees who stay with one employer and one pension fund until the normal retiring age. That was another open-ended committment which would fall upon pension funds about which they protested and they persuaded the Opposition that they had a case.
Great changes have been made in the scheme in many respects throughout its progress. Between White Paper and Committee stages the Government made a concession. They proposed that an employer who wished to do so could limit his obligation to a 5 per cent.


revaluation of the preserved right and, over and above that, he would have the right to pay a premium—now to be called a limited revaluation premium under the amended Clause 34 referred to in Clause 42—and buy back the remaining obligation into the State scheme. He would have to pay a lump sum to the Goverment for the cost of inflation-proofing the preserved rights over and above the 5 per cent. figure.
The Minister said yesterday that whenever he makes concessions there is a tendency for those involved to come back and ask for more. There has been that tendency and the Opposition have been acting in the same good faith as the Government in trying to hammer out a bipartisan policy. We have tried to avoid asking for more but, unfortunately, there remains a difference between us about the settlement of this issue. The Government insist that they can help the occupational pensions schemes only by allowing the 5 per cent. plus a premium. We consider that a better solution is for funds to be entitled to limit their obligation to 8 per cent. revaluation. That would mean a fixed percentage revaluation and would avoid the uncertainties of an open-ended commitment to pay a premium over and above that.
Yesterday, in an even more prolonged debate on the key issue of schemes which ceased to be contracted out, we argued the case for certainty as opposed to openendedness for the various premiums in the Bill. But when it comes to preserving the accrued rights of early leavers, the case for a fixed 8 per cent., with its certainty and its insurable element is extremely strong. We remain firmly committed to the view that the right arrangement is 8 per cent. as opposed to 5 per cent. plus a premium. The Minister knows the case, and I wait to see whether he will reject it.
If, as I suspect, the Minister rejects that case again, there is one thing that puzzles me. The Government Actuary has given us a first look at the actuarial tables on which so much of our discussion has centred. Everyone now seems to be agreed that the difference between us in money terms is non-existent. I am persuaded—and I trust that the Minister is—that 5 per cent. plus a premium of the kind he proposes amounts to about the

same as 8 per cent. certain over the generality of cases. To the Government and the Treasury—which matters so much in all our discussions—there is no difference. The Minister may say that it is not the same in every case and he has argued that it may even be disadvantageous to some schemes to have the 8 per cent. because they would be better off with 5 per cent. plus the limited revaluation premium.
That may be so. It depends upon the circumstances of each case, but I am persuaded that the industry, those who advise employers and those employers who have to take the critical decision whether to contract out when we have finished our work in the House would prefer the certainty of what the Opposition propose to the uncertainty of 5 per cent. plus a premium which is what the Government suggest.
Even at this late stage the Minister could make this concession and accept what we say. One more premium would come out of the Bill and the Bill would be simpler. The actuarial tables would be more straightforward because there would be no actuarial tables for partial as opposed to complete buy back and it would make the position of employers and their funds clearer. It would be easier to persuade employers to take the step which the Minister wants as much as we do. He wants as many employers as possible to contract out into good occupational schemes.
I turn to one final matter to reinforce our case. I hope that the Minister appreciates how important many sections of the industry still believe this point to be. There has been a tendency in our discussions to turn from one to another of the key points between us, and early leavers was one of the matters that was thrashed out at a comparatively early stage in our deliberations. However, there are still important groups of people whose interests are close to our own and who will very much want to achieve a genuine partnership. They will assist the Government as regards contracting out, but the matter of early leavers remains a fundamental stumbling block.
There is concern about the effect of the Government's present proposals on private employers in 1977–78. I am sure that people such as Sir Donald Sargent,


the Chairman of the Corporation of Insurance Brokers, have been pressing their views and the views of the society on the Government as strongly as they have been pressing them upon the Opposition. We are persuaded by their views on this matter. It seems that the Government are sticking for no financial reason and for no great reason of principle. It would be another significant step to take, following the many steps that have already been taken in the move towards a bipartisan scheme, if the Minister would accept our amendment at this stage.
The amendment is linked with Government Amendment No. 36 because the Government's amendment is a further refinement, as it were, of the limited valuation premium to which we object. It would be our intention, if the Minister remains of the same opinion that he held in Committee, to seek to divide the House on Amendment No. 25, which seeks to increase the 5 per cent. to 8 per cent., and to indicate our objection to any premium at all by dividing on Amendment No. 36. That will give us a last opportunity to strike this premium out of the Bill.

Mr. Paul Dean: Yesterday, when we were debating the new clauses, we were dealing with an emergency, an abnormal situation. Today we are dealing with a normal situation, namely, people changing their jobs. I think that both sides of the House will agree that the early leaver should not suffer as a result of leaving his job. The preservation requirements of the 1973 Act, which have recently come into operation, enshrine the principle that there should not be the sort of loss of pension rights which existed before that legislation was introduced.
Of course, we have to take into consideration the other side of the coin. I have two points to put before the House. First, when people leave their jobs they usually do so to better themselves and to go to positions where there is higher pay and higher pension entitlement. That is one consideration that we must bear in mind as a background to the debate.

Mr. O'Malley: I do not think I can accept that proposition. In this world of technological change many people who, perhaps, in the past may not have been in occupational pension schemes, but who

are increasingly so involved now and will be in future under the provisions of the Bill, will not be leaving their employment and have not been leaving their employment to better themselves. Many people are leaving their jobs because of changes in industry, because of redundancies and because of the trade cycle. The hon. Gentleman cannot assume that the kind of pattern which he is envisaging will necessarily be typical in future.

5.15 p.m.

Mr. Dean: I accept what the right hon. Gentleman is saying, but I am suggesting that, while it is not true in all cases, many people leave their jobs to go to better jobs with higher pay and with higher pension prospects. I suggest that that is one of the factors we must bear in mind when considering these amendments.
The second point to bear in mind is the reaction of employers and of work people. If we push employers and firms too hard in this direction they will begin to ask why they should support those who have left rather than those who are present. In our debates in Committee reference was made to the phantom payer. The Committee was warned that we could get into a situation, if we were not careful, where there would be more leavers than stayers and where the obligation on the pension schemes for the leavers would be greater than the obligation on the stayers.
We must be careful that we do not create a situation in which there has to be more provision for leavers than stayers. If we push firms too far in this direction there is a possibility that there will be a reaction against occupational pension schemes because of the obligation towards leavers. I say that as one who was responsible for the preservation requirements of the 1973 Act. I am sure that those requirements were right and long overdue, but let us be careful. Let us not push too far in a direction which will cause employers and their current work forces to feel that they are getting to the point of having to bear unreasonable obligations.
The point that I have just made is emphasised if we consider the likely costs which are likely to be involved, even with Government Amendment No. 36. First, there is the cost of up to 5 per


cent. compound for each relevant year. It is clear that many years would be involved. Secondly, there is the premium as modified by Amendment No. 36. Again, the cost involved could be substantial.
I shall quote one or two figures which have been provided for me and which are based on the Bill as it stands, without taking into account Amendment No. 36. For an employee joining a firm at 18 and leaving at 40 the single premium to be paid, in the case of a male employee, amounts to 36·7 per cent. of final earnings. That is a fairly substantial figure. For a man who leaves at 30 after eight years' membership of the scheme with an initial salary of £2,000 per annum and a final salary of £5,320 per annum the cost of securing the likely shortfall of pension will be £121. For a woman leaving at the age of 30 after eight years' membership with the same initial and final salaries, the likely shortfall of pension and the cost of securing it will be £493.
I quote those figures to illustrate that we are dealing with what may amount to substantial additional costs for the firms involved. I quote them not in any way to argue against the principle for leavers but to suggest that we must take into account the obligations that we are putting on employers under the Bill.
I turn briefly to the question of the premium. I have never been happy about it and I agree with my hon. Friend the Member for Rushcliffe (Mr. Clarke) on this point. I admit that the Government are trying to meet the argument about open-endedness in respect of the premium in Amendment No. 36, but that does not reconcile me. I have two points to make about the premium tables. It is only right that we should dwell on them for a few moments because we had had them for only a short time when we discussed this matter in Committee, and we have not had time to assess them or take expert advice about them.
Two points about the tables concern me. First, why has the assumption of the excess of incomes over earnings been changed from 1 per cent. to a half of 1 per cent.? The explanation given is that the contribution reduction has changed from 6½ per cent. to 7 per cent., but that change in the contribution reduc-

tion was not made for actuarial reasons. It was freely admitted that this was "danger money". The Government accepted the argument that 6½ per cent. did not provide an incentive to contract out and the additional half of 1 per cent. was therefore given. I am a little suspicious that the assumption has been changed from 1 per cent. to a half of 1 per cent. and I suspect that this is an example of the Government giving with one hand and taking away with the other.

Mr. O'Malley: I am surprised at the hon. Member. The Government Actuary came to the view that in strict actuarial and neutral terms the figure should have been 6·3 per cent. The figure of 6½ per cent. was mentioned in the White Paper, but in order to give some encouragement to employers and because of the risk factor an extra half of 1 per cent. was added in the Bill, the whole of which went to the employer. Whatever the policy reasons for the increase to 7 per cent., the bases immediately changed. We were then talking not about a positive yield of 1 per cent. but of a half of 1 per cent. There could not be a contribution reduction in respect of contracting out on one basis and tables on an entirely different basis involving figures which no longer had any part in the Bill.

Mr. Dean: I am not entirely convinced by what the Minister of State said. I hope that he will develop his theme when he replies to the debate, because this is the first occasion on which we have been able to argue the point. It is the first time we have had the tables long enough to be able to assess them.
The changes which the Government made—and I give them credit for responding in this way to the representations—were deliberately made not on actuarial grounds but on danger money grounds. I think the Government are, therefore, under an obligation, in the light of that, to explain why the change has been made in the assumption as to the gap between the rate of return and the increase in earnings.
My second point concerns mortality and the assumptions made about it. The same assumptions are made in these tables as for the contribution reduction—that is for the scheme which is contracted out. I should like to quote one


reaction I have had from an expert source about this assumption. It says:
The assumptions used by the Government Actuary as to mortality are that:

(a) current mortality will be similar to that experienced in pension schemes, and
(b) mortality will become progressively lighter in proportion to that of the population as a whole.
Assumption (b) is of somewhat doubtful validity as improvements tend to have most effect on the sick—who by definition are largely excluded from the experience on which the pension scheme mortality has been built up.
Until preservation, most schemes paid refunds when members left service before NPD. The experience was thus largely confined to active members and thus the mortality was exceptionally light. This is self-evident—the average health of those fit enough to be at work must be better than the average of the population as a whole…
While it is right to say that those who stay in service have very light mortality, it seems totally unjustified to make the same assertion about those who leave. Some at least of those who leave will do so because their health has broken down and they are unfit for work. To the extent that this is so the mortality of leavers will be higher than that of those who stay.
As the group of leavers in any year is smaller than the group of those who stay, one extra death a year in the smaller group will have a much greater effect on the death rates than it would on the larger group—or on the group consisting of both leavers and stayers together.
I have, therefore, suggested to the Government two criticisms of the assumptions on which the tables are based, and I hope that the Minister of State will be able to comment on them. I am not happy with the assumptions in the tables. I am certainly not reconciled with the efforts the Government have made in the Amendment No. 36 to close the open-endedness of the premium. I still much prefer no premium, but I will not repeat the arguments which my hon. Friend the Member for Rushcliffe made, and which were made in Committee.
I know that the Minister of State will remind us of the stable from which this premium comes. However, I hope that he will recognise that, although the Government's argument about the value of the premium is not new among experts, there is a strong and growing body of opinion against having a premium at all. I hope, therefore, that the right hon. Gentleman will consider seriously this simple amendment which will not cost

more but which is a different and, we believe, a more satisfactory way of achieving broadly similar objectives.

Mr. O'Malley: I am not prepared to recommend to the House that it should accept the Opposition amendment. It is best when we disagree that we make that fact plain immediately. I shall set out my arguments in some little detail for the record. I know that the pensions industry will be interested in observing my comments so that, if it is the industry's wish, there can be a continuing dialogue on this subject when it has had the opportunity to consider what I shall say this afternoon.
As the hon. Member for Rushcliffe (Mr. Clarke) acknowledged, the Government listened to and were prepared to accept the objections which the pensions industry raised about the original terms of the White Paper published in September 1974. The industry and the occupational pension schemes were being asked to accept an open-ended commitment, an uninsurable risk, and they could not do that. The view was expressed and, surprisingly, was echoed this afternoon by the hon. Member for Somerset, North (Mr. Dean) who asked why there should be support for those who left a firm—the phantom army.
5.30 p.m.
There are people—I do not include the hon. Member for Somerset, North—who do not welcome the development of preservation arrangements. Occupational pension schemes in the past have done well out of the lack of preservation arrangements where men and women have left an employment. They have got back their contributions, minus tax. The scheme takes back the contributions and the ex-employee is left with very little. That happened to me, and it has probably happened to others in this House. For pension fund managers it can mean additional expense for funds. Some managers have tended to regard people who have walked out of the door as ex-employees for whom they take no responsibility. But we in the House of Commons have made it clear that we are not prepared to tolerate that situation.
The hon. Member for Somerset, North took a step down that road in the legislation for which he was responsible in 1973. We have taken a further step. I


was rather surprised at hon. Gentleman's attitude. He appeared to be saying: "Why should we support people who have left?"

Mr. Paul Dean: I did not say that. What I was saying was that we must take into account the additional cost obligations which we are putting on employers—obligations which are additional to those in the 1973 Act. I was saying that if we make the obligations too expensive, there will be a direct clash between the interests of leavers and those of stayers.

Mr. O'Malley: I am grateful to the hon. Gentleman for making that clear and I accept what he said.
The Government began with the proposition that it was intolerable that men or women who had left their employment in a period of increasing labour mobility should on retirement or widowhood be so much worse off because they had not stayed with one employer for 40 years but had had a number of jobs. For that reason we set out in the White Paper that there would be the earnings dynamism pre-award for early leavers. This was to fall on the schemes.
We recognised the objections raised by schemes and for that reason we accepted a change. The change took place and instead of there having to be a requirement on schemes to undertake the whole of the pre-award earnings dynamism, the employer, if he wished, could undertake to pay 5 per cent. compound interest in respect of the pre-award dynamism and a once-for-all premium when an employee left the scheme. It was envisaged that the Government would pay the difference between the 5 per cent. and the actual movement of average earnings for the period until the man retired.
That formula was not a Government formula. It was put forward, after mature deliberation, by the Life Offices Association. We are not talking about a small group of people without expertise. Other proposals were put forward. One suggestion was that the employers should provide x per cent. of pre-award dynamism compound and that the rest should be met from the National Insurance Fund, but if there were no premium that would have involved a change in the contribution reduction in respect of con-

tracted-out employment. It would have meant that those enterprises in which there was a less than average degree of labour mobility would pay for the costs of those with a high degree of labour mobility.
The Government took the view that since we wanted to set a rate which could be a long-term rate rather than a rate which would be changed constantly the figure of about 5 per cent. was reasonable, but we thought that it was not desirable merely to say that there should be no premium and that adjustment could be made to the contribution reduction. We thought that would be inequitable.
When the Bill was published it was thought that these matters had been settled, but there was always a difference of view in the industry on this matter, and the Government accepted one proposal rather than another. Strong views are held in the industry that the Government accepted the wrong proposal for the industry.
I want to deal with that matter now. First, Amendment No. 36 introduces for limited revaluation premiums actuarial tables which vary with the yield on investments. The effect will be to help schemes by evening out fluctuations in the market prices. There will be a series of tables corresponding to the value of some market index. The use of tables of that kind will be of assistance to schemes.
I do not think I can add to what I said in my intervention in the speech of the hon. Member for Somerset, North in regard to whether there should be a positive yield of 1 per cent. or a half of 1 per cent. because of the change from 6½ per cent. to 7 per cent. We are working on the basis of the Government's actuarial figures on the assumption of ½ per cent. rather than of 1 per cent. implicit in the reduction of 6½ per cent. If I decide that there is anything further to add, I shall let the hon. Gentleman know.
There are always questions about mortality considerations which one has not heard before. I do not believe that the figure is as high as is suggested, but I shall consult the Government Actuary and I shall write to the hon. Gentleman.
The nub of the discussion is that we accepted an amendment when the Bill


was published which changed the responsibility or the method of apportioning cost and obligations for the preservation of pensions in respect of early leavers which was a matter of some discussion in the industry. More than one formula was put forward. It is now suggested that we should return to a situation in which there is no premium.
There is one central point which I should like to place on record and which perhaps will be important in the continuing dialogue. The Opposition have said that their proposal to limit the revaluation to 8 per cent. without premium would cost nothing. They base that statement on the inference that the Government Acturay in calculating the contributiion reduction and in working out specimen tables which have already been circulated, worked on the assumption that earnings inflation in the long term would be 8 per cent. a year.
There is a fallacy in this argument, which I shall explain. As the Bill stands, there is provision for the actuarial basis to be reviewed at intervals. At any particular time the cost of premiums will reflect the assumption of the Government Actuary made at the time when the tables were constructed in respect of the movement of earnings in the long term. If that assumption has altered when the tables are reviewed the amount of the premium will alter correspondingly. If, however, there are no premiums this possibility of adjustment or review is removed.
I do not believe that pensions interests would wish to see the limit altered from time to time—I mean the limit on the revaluation of 8 per cent. mentioned in the amendment—because their whole case is that they want to have something fixed permanently. Therefore I assume that we should be asked to have one figure and to stick to it through thick and thin. This is where the potential cost obviously comes in, when the figure of 8 per cent. falls short of the figure which the Government Actuary would have assumed in calculating the premiums in the current tables. If I can put it in another and perhaps simpler way, the arrangement in the Bill allows premiums to be adjusted on review so as to reflect broadly the cost of providing the benefits.

If we remove the premium this element of flexibility will be lost and we shall be left with a rigid and arbitrary yardstick of earnings movements, which, in the circumstances which I have mentioned, would lead to an unjustifiable cost falling on contributors generally.
In addition to those reasons there is extra cost inherent in the proposals that occupational schemes' liabilities for early leavers should be fixed for dynamism at 8 per cent. a year instead of 5 per cent. plus a premium, even if the 8 per cent. were accurate over the long term. As the schemes will be required to pay the lesser of 8 per cent., or the actual rate of increase in national average earnings, there will be an extra cost to the State scheme whenever the increase in a year is more than 8 per cent., even if the average increase, taking one year with another, is 8 per cent. For example, if the increases in alternate years were 6 per cent. and 10 per cent., the occupational scheme would be paying 6 per cent. and 8 per cent. alternatively and the extra costs falling on the State scheme would be 2 per cent. every other year.
I explained why I was not prepared to accept this amendment. I have tried to give an answer to the cost question in some detail and to put it accurately on the record. If the pensions interests, when they have considered what I have said this afternoon, feel that they would like to come back to me to discuss the matter on that basis, I shall be pleased to do that before the Bill goes to another place for consideration.

Mr. Kenneth Clarke: The Minister of State began by saying that there was disagreement between us. I regret to say that that disagreement remains between us at the end.
There is no argument between us about the preserved rights of the early leavers. There is no intention on the part of the Opposition or of any of the pensions interests to prejudice the legitimate expectations of earnings-related pension entitlement for those who move from job to job or who leave occupational pension schemes before retirement age. That was a red herring in the argument.
The remainder of what the Minister said was an answer to the points we made. We do not find that answer


acceptable. It is not my understanding that it is intended that the 8 per cent. figure should be rigid, fixed, and immutable for all time and not changeable at any stage. That is not the basis of the proposal being made. I trust that the Minister will inquire further about that and discover whether his opposition may not be based in part on a misunderstanding. We are persuaded that 8 per cent.

with no premium is preferable to 5 per cent. plus a premium.

It is our intention, as this is an important point between us, to press the matter to a Division.

Question put, That the amendment be made:—

The House divided: Ayes 172, Noes 226.

Division No. 230.]
AYES
[5.45 p.m.


Aitken, Jonathan
Higgins, Terence L.
Page, Rt Hon R. Graham (Crosby)


Alison, Michael
Hordern, Peter
Parkinson, Cecil


Arnold, Tom
Howe, Rt Hon Sir Geoffrey
Pattie, Geoffrey


Atkins, Rt Hon H. (Spelthorne)
Howell, David (Guildford)
Percival, Ian


Banks, Robert
Howell, Ralph (North Norfolk)
Peyton, Rt Hon John


Bennett, Dr Reginald (Fareham)
Hurd, Douglas
Pink, R. Bonner


Benyon, W.
Hutchison, Michael Clark
Prior, Rt Hon James


Biffen, John
Irvine, Bryant Godman (Rye)
Raison, Timothy


Biggs-Davison, John
Irving, Charles (Cheltenham)
Rathbone, Tim


Blaker, Peter
James, David
Renton, Rt Hon Sir D. (Hunts)


Body, Richard
Jenkin, Rt Hon P. (Wanst'd &amp; W'df'd)
Renton, Tim (Mid-Sussex)


Boscawen, Hon Robert
Johnson Smith, G. (E. Grinstead)
Rhys Williams, Sir Brandon


Boyson, Dr Rhodes (Brent)
Jones, Arthur (Daventry)
Ridley, Hon Nicholas


Brittan, Leon
Jopling, Michael
Ridsdale, Julian


Brotherton, Michael
Kellett-Bowman, Mrs Elaine
Rifkind, Malcolm


Budgen, Nick
Kershaw, Anthony
Roberts, Wyn (Conway)


Bulmer, Esmond
Kimball, Marcus
Rodgers, Sir John (Sevenoaks)


Butler, Adam (Bosworth)
King, Tom (Bridgwater)
Rossi, Hugh (Hornsey)


Carlisle, Mark
Kirk, Peter
Sainsbury, Tim


Clark, Alan (Plymouth, Sutton)
Knox, David
St. John-Stevas, Norman


Clark, William (Croydon S)
Lamont, Norman
Scott-Hopkins, James


Clarke, Kenneth (Rushcliffe)
Lane, David
Shaw, Giles (Pudsey)


Clegg, Walter
Langford-Holt, Sir John
Shaw, Michael (Scarborough)


Cockcroft, John
Latham, Michael (Melton)
Shelton, William (Streatham)


Cope, John
Lawrence, Ivan
Shersby, Michael


Costain, A. P.
Lawson, Nigel
Silvester, Fred


Crouch, David
Le Marchant, Spencer
Sims, Roger


Dean, Paul (N Somerset)
Lewis, Kenneth (Rutland)
Sinclair, Sir George


Drayson, Burnaby
Luce, Richard
Spicer, Jim (W Dorset)


du Cann, Rt Hon Edward
McAdden, Sir Stephen
Spicer, Michael (S Worcester)


Durant, Tony
McCrindle, Robert
Stanbrook, Ivor


Dykes, Hugh
Macmillan, Rt Hon M. (Farnham)
Stanley, John


Eyre, Reginald
McNair-Wilson, M. (Newbury)
Steen, Anthony (Wavertree)


Fairbairn, Nicholas
McNair-Wilson, P. (New Forest)
Stokes, John


Fairgrieve, Russell
Marshall, Michael (Arundel)
Stradling Thomas, J.


Fisher, Sir Nigel
Marten, Neil
Tapsell, Peter


Fletcher, Alex (Edinburgh N)
Mates, Michael
Taylor, R. (Croydon NW)


Fletcher-Cooke, Charles
Mather, Carol
Tebbit, Norman


Fookes, Miss Janet
Maude, Angus
Temple-Morris, Peter


Fowler, Norman (Sutton C'f'd)
Maudling, Rt Hon Reginald
Thatcher, Rt Hon Margaret


Fox, Marcus
Maxwell-Hyslop, Robin
Thomas, Rt Hon P. (Hendon S)


Fraser, Rt Hon H. (Stafford &amp; St)
Mayhew, Patrick
Townsend, Cyril D.


Fry, Peter
Meyer, Sir Anthony
Trotter, Neville


Galbraith, Hon. T. G. D.
Miller, Hal (Bromsgrove)
van Straubenzee, W. R.


Gardiner, George (Reigate)
Moate, Roger
Vaughan, Dr Gerard


Glyn, Dr Alan
Monro, Hector
Viggers, Peter


Goodhart, Philip
Montgomery, Fergus
Wakeham, John


Goodhew, Victor
Moore, John (Croydon C)
Warren, Kenneth


Gorst, John
Morgan-Giles, Rear-Admiral
Wearherill, Bernard


Gow, Ian (Eastbourne)
Morris, Michael (Northampton S)
Whitelaw, Rt Hon William


Grant, Anthony (Harrow C)
Morrison, Hon Peter (Chester)
Wiggin, Jerry


Gray, Hamish
Neave, Airey
Winterton, Nicholas


Griffiths, Eldon
Nelson, Anthony
Wood, Rt Hon Richard


Grylls, Michael
Neubert, Michael
Young, Sir G. (Ealing, Acton)


Hall, Sir John
Newton, Tony



Hall-Davis, A. G. F.
Normanton, Tom



Hamilton, Michael (Salisbury)
Nott, John
TELLERS FOR THE AYES:


Hannam, John
Oppenheim, Mrs Sally
Mr. Micbael Roberts and


Hayhoe, Barney
Osborn, John
Mr. Anthony Berry




NOES


Allaun, Frank
Atkinson, Norman
Bean, R. E.


Anderson, Donald
Bain, Mrs Margaret
Beith, A. J.


Archer, Peter
Barnett, Guy (Greenwich)
Benn, Rt Hon Anthony Wedgwood


Armstrong, Ernest
Bates, Alf
Bennett, Andrew (Stockport N.)




Bidwell, Sydney
Henderson, Douglas
Reid, George


Blenkinsop, Arthur
Hooley, Frank
Richardson, Miss Jo


Booth, Albert
Hooson, Emlyn
Roderick, Caerwyn


Boothroyd, Miss Betty
Howells, Geraint (Cardigan)
Rodgers, George (Chorley)


Bottomley, Rt Hon Arthur
Hoyle, Doug (Nelson)
Rodgers, William (Stockton)


Bray, Dr Jeremy
Hughes, Rt Hon C. (Anglesey)
Rooker, J. W.


Brown, Robert C. (Newcastle W)
Hughes, Robert (Aberdeen N)
Roper, John


Butler, Mrs Joyce (Wood Green)
Hunter, Adam
Rose, Paul B.


Callaghan, Rt Hon J. (Cardiff SE)
Irving, Rt Hon S. (Dartford)
Ross, Stephen (Isle of Wight)


Callaghan, Jim (Middleton &amp; P)
Jackson, Miss Margaret (Lincoln)
Ross, Rt Hon W. (Kilmarnock)


Canavan, Dennis
Janner, Greville
Rowlands, Ted


Carmichael, Neil
Jay, Rt Hon Douglas
Ryman, John


Carter, Ray
Jeger, Mrs Lena
Sandelson, Neville


Carter-Jones, Lewis
Jenkins, Hugh (Putney)
Shaw, Arnold (Ilford South)


Cartwright, John
Jenkins, Rt Hon Roy (Stechford)
Sheldon, Robert (Ashton-u-Lyne)


Castle, Rt Hon Barbara
Johnson, Walter (Derby S)
Shore, Rt Hon Peter


Clemitson, Ivor
Jones, Alec (Rhondda)
Short, Rt Hon E. (Newcastle C)


Cocks, Michael (Bristol S)
Jones, Dan (Burnley)
Short, Mrs Renée (Wolv NE)


Cook, Robin F. (Edin C)
Kaufman, Gerald
Silkin, Rt Hon John (Deptford)


Cox, Thomas (Tooting)
Kelley, Richard
Silverman, Julius


Crawford, Douglas
Kerr, Russell
Skinner, Dennis


Crawshaw, Richard
Kilroy-Silk, Robert
Small, William


Cryer, Bob
Kinnock, Neil
Smith, John (N Lanarkshire)


Cunningham, G. (Islington S)
Lamborn, Harry
Snape, Peter


Dalyell, Tam
Lamond, James
Spearing, Nigel


Davidson, Arthur
Leadbitter, Ted
Spriggs, Leslie


Davies, Bryan (Enfield N)
Lee, John
Stallard, A. W.


Davies, Denzil (Llanelli)
Lipton, Marcus
Stewart, Donald (Western Isles)


Deakins, Eric
Litterick, Tom
Stewart, Rt Hon M. (Fulham)


de Freitas, Rt Hon Sir Geoffrey
Lomas, Kenneth
Stoddart, David


Delargy, Hugh
Loyden, Eddie
Stott, Roger


Dell, Rt Hon Edmund
Luard, Evan
Strang, Gavin


Dormand, J. D.
Lyon, Alexander (York)
Summerskill, Hon Dr Shirley


Douglas-Mann, Bruce
MacCormick, Iain
Taylor, Mrs Ann (Bolton W)


Dunn, James A.
McElhone, Frank
Thomas, Mike (Newcastle E)


Dunnett, Jack
MacFarquhar, Roderick
Thomas, Ron (Bristol NW)


Dunwoody, Mrs Gwyneth
McMillan, Tom (Glasgow C)
Thompson, George


Eadie, Alex
McNamara, Kevin
Thorne, Stan (Preston South)


Edelman, Maurice
Madden, Max
Tierney, Sydney


Edge, Geoff
Magee, Bryan
Tomlinson, John


Edwards, Robert (Wolv SE)
Marks, Kenneth
Tomney, Frank


Ellis, Tom (Wrexham)
Marquand, David
Torney, Tom


English, Michael
Marshall, Dr Edmund (Goole)
Tuck, Raphael


Ennals, David
Marshall, Jim (Leicester S)
Varley, Rt Hon Eric G.


Evans, Gwynfor (Carmarthen)
Mason, Rt Hon Roy
Wainwright, Edwin (Dearne V)


Evans, Ioan (Aberdare)
Maynard, Miss Joan
Walden, Brian (B'ham, L'dyw'd)


Evans, John (Newton)
Mellish, Rt Hon Robert
Walker, Terry (Kingswood)


Ewing, Harry (Stirling)
Mendelson, John
Ward, Michael


Faulds, Andrew
Mikardo, Ian
Watkins, David


Fernyhough, Rt Hon E.
Millan, Bruce
Watkinson, John


Flannery, Martin
Miller, Dr M. S. (E Kilbride)
Watt, Hamish


Foot, Rt Hon Michael
Miller, Mrs Millie (Ilford N)
Weetch, Ken


Ford, Ben
Mitchell, R. C. (Soton, Itchen)
Welsh, Andrew


Forrester, John
Morris, Alfred (Wythenshawe)
White, Frank R. (Bury)


Fowler, Gerald (The Wrekin)
Newens, Stanley
Whitehead, Phillip


Fraser, John (Lambeth, N'w'd)
Noble, Mike
Wigley, Dafydd


Freeson, Reginald
Oakes, Gordon
Willey, Rt Hon Frederick


George, Bruce
O'Halloran, Michael
Williams, Alan Lee (Hornch'ch)


Gilbert, Dr John
O'Malley, Rt Hon Brian
Williams, W. T. (Warrington)


Ginsburg, David
Orbach, Maurice
Wilson, Alexander (Hamilton)


Golding, John
Orme, Rt Hon Stanley
Wilson, Gordon (Dundee E)


Gould, Bryan
Ovenden, John
Wise, Mrs Audrey


Graham, Ted
Owen, Dr David
Woodall, Alec


Grimond, Rt Hon J.
Pardoe, John
Wrigglesworth, Ian


Grocott, Bruce
Park, George
Young, David (Bolton E)


Hamilton, W. W. (Central Fife)
Pavitt, Laurie



Harper, Joseph
Pendry, Tom



Harrison, Walter (Wakefield)
Penhaligon, David
TELLERS FOR THE NOES:


Hatton, Frank
Perry, Ernest
Mr. James Hamilton and


Hayman, Mrs Helene
Phipps, Dr Colin
Mr. John Ellis


Healey, Rt Hon Denis
Price, William (Rugby)



Heffer, Eric S.
Radice, Giles

Question accordingly negatived.

Orders of the Day — Clause 35

REQUISITE BENEFIT FOR WIDOW

Mr. Kenneth Clarke: I beg to move Amendment No. 26 in page 25, line 6, at beginning insert 'One half of'.
This amendment touches on a small but sometimes important point arising from the widow's benefit. It arises when the situation occurs, as it often does, where someone entitled to a pension benefit dies and leaves behind not only a legal widow but other beneficiaries, such as mistresses, often described as common law wives, or dependent families who are


not legal and legitimate. Such situations obviously occur in day-to-day life.
The problem that often arises in practice concerns the person to whom the widow's benefit or its equivalent ought to be payable in individual cases. In practice most private occupational schemes, including the majority of schemes which we hope will be contracted out under the new scheme, exercise some discretion in deciding to whom to pay the equivalent of the widow's benefit in such circumstances. This discretion is important in individual cases.
The problem of what to do about this discretion for schemes which are contracted out was first raised in a similar situation under the 1973 Act when minimum standards were set down for private occupational schemes. A decision had to be taken by the House whether to allow such a discretion to continue to be exercised by the trustees of occupational pension funds. On that occasion the decision of the Government supported by the House and not opposed to by the then Labour Opposition, was in accordance with the terms of what is now Section 34(4) of the principal Act—that trustees should continue to have such a discretion.
The Government, without any pre-warning of a change of attitude on their part, have chosen to limit the discretion which trustees have in such cases to any excess pension entitlement over and above the guaranteed minimum pension. The clause lays down that the guaranteed minimum pension, a substantial earnings-related and inflation-proofed amount, should in all cases in contracted out occupational pension schemes be paid to the widow, and the discretion left to trustees is limited to any excess over and above the guaranteed minimum pension.
Obviously irregularities, if I may use that somewhat formal phrase, do not occur in the case of most people who die leaving someone entitled to a widow's benefit. But no one should pretend that we are dealing with only a few cases. Very many such cases occur when trustees have to consider the problem. I have been reliably informed that one large scheme finds that about 16 per cent. of cases in which widow's benefit is left behind by a deceased person involve problems of this kind. Discretion is exercised to allow payment to common

law wives, illegitimate children or other more suitable dependants, as opposed to the regular widow who may have been long since estranged from her deceased husband. There are such cases, 16 per cent. of them in the scheme I have quoted, in which that is entirely the right decision, of which most hon. Members would approve.
Of course the lawful widow has her entitlement even if she has long since been separated from her husband, but there can be cases, when a wife comes "out of the blue" on hearing of the death of her husband, in which it would be quite wrong for her to have the entitlement to the exclusion of financial help to a common law wife or family that the deceased left behind. In many cases, if the deceased member of the scheme were alive, it would very much more meet his wishes, and even his expectations of where his contributions were to go, if much better provision could be made for his illegitimate dependants or the woman who has been living with and dependent upon him for many years.
This was urged in Committee but was rejected by the Under-Secretary of State. I regret to say that in my opinion the arguments he used were not up to his usual quality. They smacked somewhat of a brief with which he had been supplied, on a basis inspired more by administrative tidiness, trying to bring matters in line with the State scheme, than with meeting the sensible justice of the case. The problem of successive Governments has been that a State scheme cannot have the same flexibility as far as the basic State pension is concerned because national insurance widows' benefits have always been payable to legal widows. No one can object to that. It would be quite impossible for the State and the National Insurance Scheme to set up the necessary machinery to enable discretion to be exercised in all such cases and for there to be the right amount of flexibility. That is inescapable.
In our opinion, however, there is no reason to go on to say that because the State cannot match that flexibility it would be wrong to permit discretion to be exercised by trustees of occupational pension funds who can exercise such discretion, and who do so in a reasonable way. As far as I am aware, no one has ever seriously challenged the way in


which trustees use this discretion. It is difficult to have a proper appeals procedure and so on, but in my constituency work and from inquiries I have made about the Bill I have no experience of any serious challenge to the exercise of this discretion by trustees. I have no doubt that there are some who might be challenged, but I believe that they would be only a tiny number.
It seems to me that in a 1975 Social Security Pensions Bill the Government ought to make provision for the kind of discretion I am describing, to allow trustees to do justice to the merits of an individual case, and not to discriminate unfairly against a person who was not legally married to a deceased person but was totally dependent on him or who may have children who were dependent on that deceased person. For that reason we wish to preserve this discretion. Similar amendments were moved in Committee but the Under-Secretary rejected them.
It will be noticed that there is a difference in the amendment we have now tabled, because the hon. Gentleman used some arguments about the changed position because of the rôle that guaranteed minimum pension plays in this scheme. We have tried to settle with the Government and suggest that there might continue to be discretion above one-half of the guaranteed minimum pension, so that the legal widow could have half of the guaranteed minimum pension in all cases but that the desirable discretion which I have been describing might be retained for any excess pension entitlement above that figure.

Mr. Alec Jones: Certainly we had noticed the change between the amendment that is put forward this afternoon and the amendment moved in Committee. When I saw the change in the amendment I immediately went through the Committee stage proceedings and read the contributions made by several hon. Members in the Committee, including that of the hon. Member for Rushcliffe (Mr. Clarke), who, I noted, advised us that we should not stick so rigidly to the legal status of matrimony. I immediately went to The Times "Guide to the House of Commons" to check the hon. Gentleman's status, wondering whether

he was speaking in Committee as a Member of the House or as a barrister. I trust that that difficulty will be resolved with the hon. Gentleman's good lady when he gets home this evening.
Certainly it is true that deciding how one treats a legal widow as far as benefit is concerned, as against a common law widow if I may conjure up that phrase—the other kind of dependant—is not simple. I looked again at the points we made in Committee. There is still the significant point that there is an interrelationship between the State scheme and private pension schemes in the Bill, and it would cause considerable difficulties if the occupational pension scheme chose to pay a dependant other than a widow while the State scheme continued to pay only the widow.
The hon. Gentleman suggested that we had introduced this proposal without warning and that it really was a matter of administrative tidiness. I remind him that it was specifically spelt out in the White Paper that
Under the contracting out scheme … the widow receives in total at least as much as if her husband had never been contracted out at all.
That is the principle which we feel is worth maintaining. The widow's guaranteed minimum pension is a counterpart of the State scheme's additional component for widows, because if she does not receive it she will be worse off as a result of the contracting-out arrangement. It is a fundamental feature of these arrangements that no person shall be worse off than he or she would have been if there had been no contracting out.
Again, the hon. Gentleman made the point that in such cases, if we adopted this kind of amendment, these widows would be unable to exercise any statutory right of appeal against the scheme such as they would have if a State scheme pension were at stake. It is because we believe that the principle is right, while accepting that there are bound to be difficulties, just as there are bound to be grey areas in between, that we concluded that the right answer was that all widows should be treated in the same way, receiving the State scheme widow's pension and, where this applies, the widow's guaranteed minimum pension.
The hon. Gentleman spoke of excluding any financial help for the non-widowed dependant, the other dependant. I am quite sure he did not mean that but accepts that the schemes will still be able to exercise a degree of flexibility in relation to the excess over guaranteed minimum pension. We have looked at this and we accept that there are these difficult decisions to be made, but on balance we believe that we were right to stick to the principle as enunciated in the White Paper and implemented in the Bill.

Mr. Kenneth Clarke: I note that these proceedings are not being carried live on radio, so that I have no need to put on record that I have no personal interest at all in the amendments that I move. I am disappointed by the Under-Secretary's reply but on an entirely disinterested basis. I express disappointment, but as I believe that this is, for the immediate future, the last contribution by the Under-Secretary on this or any other pension Bill, I must say we regret that he is going back to his native country and will have new responsibilities elsewhere.
In his short stay with the very small band of Members who follow this subject closely, the hon. Gentleman earned the respect of both sides of the Committee for his work in pensions. I am sure that the Welsh Office will be extremely well served by him now that he has received his new posting. I trust that when he makes his first speech on his new responsibilities he will have a better case to argue than the one he has just argued in his final speech on the Bill.
I am overlooking some vital technical Government amendments which appear on the Paper. The hon. Gentleman will have to move those amendments with particular fluency and charm to erase the memory of the case he has just deployed.
I remain quite unconvinced and sorry that he relies so much on the discrepancies that would arise. There has always been a difference in practice between the State scheme and occupational pension schemes. Acceptance of our amendments would mean that some legal widows, whose husbands had been in contracted-out schemes, would be slightly worse off than widows whose husbands had remained in the State scheme. I can only

say, in the circumstances I am describing, that, given the justice of the case I have in mind, it will be only the just cases on which trustees try to exercise a discretion. There will be a minor discrepancy but not a serious problem for legal widows. That is an inconsistency and an anomaly which I should be prepared to accept in order to retain this valuable discretion.
I am sorry that the Government feel it necessary to negative the amendment. I trust that even at a later stage in another place there might be someone prepared to continue to argue the point.

Amendment negatived.

Orders of the Day — Clause 40

STATE SCHEME PREMIUMS

Amendments made: No. 30, in page 29, line 40, leave out Clause 40.

Orders of the Day — Clause 41

PREMIUM ON TERMINATION OF CONTRACTED-OUT SCHEME

No. 31, in page 31, line 12, leave out Clause 41.—[Mr. O'Malley.]

Orders of the Day — Clause 42

PREMIUM WHERE GUARANTEED MINIMUM PENSION EXCLUDED FROM FULL REVALUATION

Amendments made: No. 34, in page 32, line 28, leave out from 'shall' to 'shall' in line 31 and insert:
'in respect of the earner pay a state scheme premium (which may be referred to as a "limited revaluation premium").

(2) Such a premium shall be paid to the Secretary of State within the prescribed period; and its amount'.

No. 36, in page 32, line 39, leave out from 'tables' to end of line and insert:
'as in force at the time when the earner's service in contracted-out employment is terminated; and

(a) the tables shall be so framed as to embody the assumption that the increase of weekly equivalent required by section 34(7) is 5 per cent. compound for each relevant year after that in which the earner's service is terminated; and
(b) that assumption shall prevail over any different provision made by the scheme.

(3A) Regulations for the purposes of subsection (3) above—

(a) shall be made only after consultation with the Government Actuary; and
(b) shall be so framed that the tables applicable from time to time vary with the yield on such investments or classes of investments as the Secretary of State thinks fit.

(3B) In certifying any amount under subsection (2) above the Secretary of State'.— [Mr. O'Malley.]

Orders of the Day — Clause 65

SHORT TITLE, CITATION AND EXTENT

Mr. Alec Jones: I beg to move Amendment No. 40, in page 51, line 17, leave out '1957' and insert '1975'.
I do not know what the hon. Member for Rushcliffe (Mr. Clarke) was talking about when he was gazing into the future. I am here as the Under-Secretary of State for Health and Social Security and I believe that to be the position I hold.
I remind the hon. Gentleman that this amendment is the crux of the Bill. On its success lies the reward which my right hon. Friends, feel should be coming their way after the many months they have laboured on the Bill. As the hon. Gentleman knows, the amendment corrects a printing error.

Amendment agreed to.

Orders of the Day — Schedule 1

DEFERRED RETIREMENT

Amendments made: No. 42, in page 53, line 13, leave out 'half'.

No. 43, in page 53, line 26, leave out 'half'.—[Mr. Kenneth Clarke.]

Orders of the Day — Schedule 2

CONTRACTING-OUT REGULATIONS

Mr. O'Malley: I beg to move Amendment No. 44, in page 56, line 19, at end insert:
'(dd) for the Secretary of State, in prescribed circumstances where a premium has been paid in respect of a person, to direct the payment out of the National Insurance Fund to that person or his estate of an amount equal to a prescribed part of the premium;'.
This is a technical amendment, and that is my last word on the subject of the Bill as it passes through the House. How-

ever, at the risk of being briefly out of order, I should like to thank all hon. Members on both sides of the House, who have taken an interest in the Bill. It has taken a few months to discuss and only the hardy ones of us are left. The rest have very sensibly decided at this stage that they have had enough.
I should like to thank both the hon. Member for Rushcliffe (Mr. Clarke) and the hon. Member for Brentwood and Ongar (Mr. McCrindle) who have led for the Opposition on the Front Bench. We have had one of the most constructive series of debates on a Bill which I have experienced in more than a decade in the House. I certainly appreciate what has been done. It has done good for the reputation of the House and, I hope Parliament as a whole. I am grateful to the hon. Gentlemen.

6.15 p.m.

Mr. Kenneth Clarke: I rise not to oppose the amendment but simply to express on behalf of my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) and myself our thanks to the Minister. I repeat what we expressed on several occasions in a fascinating and certainly the most interesting and constructive Standing Committee on which I have served in the short time I have been a Member of the House: our admiration for the skill of the right hon. Gentleman. He adopted a very fair and genuine approach to all our discussions. Had it not been for his expertise and ability to answer our detailed questions so readily, we should have made no progress at all.
It appears that the Minister has completely satisfied all but a small section of hon. Members. I am sure he will continue to do so.

Amendment agreed to.

Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified.]

The Secretary of State for Social Services (Mrs. Barbara Castle): I beg to move, That the Bill be now read the Third time.
This is a historic moment, when we complete the House of Commons stage of the first profound change in pensions policy since Sir William Beveridge formed national insurance after the war.


The Bill takes us as great a leap forward as the Beveridge Report did in those faraway days.
This is a very happy moment for Labour Members. I appreciate very much the remarks of the hon. Member for Rushcliffe (Mr. Clarke) about my right hon. Friend the Minister of State. I too, wish to pay a tribute to my right hon. Friend and to my hon. Friend the Under-Secretary, who have borne the heat and burden of the detailed discussions in Committee and, as the Opposition spokesman has just made clear, did so with a pertinacity, clarity and courtesy which was appreciated by all members of the Committee.
We are grateful to Opposition Members for the harmonious passage of the Bill. There have been one or two hiccoughs in the harmony but they were not profound and, I hope, not enduring.
It has been heartening to find that Opposition Members now accept that a modern pension scheme must embody the sort of principles which we have embodied in the Bill; that it is no good starting on a major piece of pensions legislation today except on the basis that it guarantees security in old age; that both the contributions and the benefits must be at a level adequate to take people in old age and widowhood off means-testing and off supplementary benefit; and that a scheme to meet the urgent needs of our society cannot be allowed to take too long to mature.
The older worker who has waited a long time for a proper pension scheme must be helped urgently. Therefore, the maturity period of 20 years brings hope to thousands of older workers who are now approaching the period in which they will have to depend on the retirement provisions that this so-called advanced society of ours has been able to make.
Any modern pension scheme also must have, as ours has, a strong redistributive element. It must correct some of the exploitation that the lower paid have suffered during their working life. As we bring this stage of the Bill to its conclusion, it is a matter for congratulation to know that the lower-paid workers will in old age be lifted more radically than any other members of our society. For example, a married man on £20 a

week will, under these provisions, be able to retire on a higher income than he had when he was at work. The £30-a-week married man will be able to retire on three-quarters of his pay.
To us, another vital principle in the Bill has been our determination to see that in future the manual worker should enjoy the quality of status and treatment which has hitherto been the prerogative of the white-collar man, that he should be able to enjoy, through the pre-award dynamism of the scheme, the equivalent of the final-salary scheme status.
One of the most exciting elements in the Bill is the provision that the retirement pension shall be based on a man or woman's 20 best-paid years. That is a piece of inspired thinking that has come out of the collective discussion in my Department of which we can be very proud.
The House will not need reminding of the importance to me, if not to the Opposition, of the provision to give women complete equality of treatment under the Bill—indeed, better than equal treatment, because I recognise that they will move for the first time in history to a privileged position as they will draw their pension at an earlier age.
I am very proud of the concept of the home responsibility credit, the fact that at last we shall enable the woman who comes in and out of the labour market, because of her family commitments, to count for the purposes of the membership qualification the years she spends at home bringing up a family or looking after an aged relative.
Last, but of course not least, there is the concept that we must ensure in our pensions provision that people will know when they retire that the purchasing power of their pension is sustained. We must eradicate the anxieties that hang over the retirement of so many of our citizens as they see their non-inflation-proofed pensions withering away in value. Inflation-proofing has led us to the new and enduring concept of the partnership between the State scheme and the private pension scheme. One of the most encouraging things that I found in the long discussions both before the Bill was introduced and during its passage was the way in which the private pensions industry, when faced with a challenge, proved capable of rising to it.
I remember the long discussions we had on the 1973 legislation of our predecessors, when some of us argued that we needed to set the standards required for everyone and then call on the private pensions industry to rise to them, rather than to tackle the matter the other way round, as our predecessors did, saying "We want private pensions schemes to endure, so we must not set the standards so high that they cannot attain them".
The unique feature of our policy is that we did it the other way round. We said that there must be equality of treatment for women, an adequate pension on retirement, a shorter maturity period, a redistributive element, a 100 per cent. entitlement for the widow, and all the other points that we stressed. We said that above all there must be inflation-proofing of the pension once it was drawn.
Having said that, we added "We also want the continuation of good private pension schemes, so how can we help them to meet these standards?" It is from that new approach that the harmony in the House over this measure has emerged.
I believe that no Government could go back on the principle that the State must, whether for its State scheme membership or in partnership with the members of private schemes, protect the pension against devaluation through inflation. That is why I am sure that the Opposition must know in their heart of hearts, although I cannot expect them to admit it publicly, that their own State reserve scheme could not work. It could not work to produce this principle, because it is not possible to guarantee inflation-proofing under a funded scheme.
We have come together by this inspired policy to agree that it is time this country brought its pension policy in line with the pension policies of other advanced societies, that it is time we no longer dragged along with the remnants of the old poor law approach for people in old age, that it is time we gave peope dignity and security. This policy provides the basis upon which the citizens of this country can retire without anxiety or loss of self-respect.
I am delighted that we have reached the degree of harmony that we have. Of course, we do not agree on every point—

we have had our disagreements and divisions—but it is clear that we are united on the central policy.
I recommend the Bill to the House far its Third Reading, in the hope and belief that the policy that it embodies will endure under any Government.

6.27 p.m.

Mr. Norman Fowler: I congratulate the ministerial team and their departmental advisers on the hard work they have put in on the Bill. I join my hon. Friend the Member for Rushcliffe (Mr. Clarke) particularly in his commendation of the Minister of State, whose reputation in pensions matters is formidable, and of the Under-Secretary, the hon. Member for Rhondda (Mr. Jones), who, despite his protestations, we all know will soon leave us to go to another place.

Mr. Alec Jones: Not the other place.

Mr. Fowler: Perhaps the hon. Gentleman would also like to leave for the other place. Judging from the sudden and unexpected appearance of the hon. Member for Oldham, East (Mr. Lamond) in the latter stages of our debate, we presumably do not have to look very far to see who is to replace the hon. Gentleman.
I am sure that the ministerial team will also think it right to congratulate the opposition team, as the Minister of State already has done. They will congratulate in particular my hon. Friend the Member for Rushcliffe, who is always articulate and wise, my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle), and other Members who served on the Committee.
The Opposition do not have the resources of the Government. Nevertheless the breadth of the amendments put forward by the Opposition and the concessions that have been gained point to the very hard work done by the Opposition team.
It would be right to state the basis on which the Opposition have approached the Bill, which is the third pensions Bill the House has debated in six years. First there was the Crossman scheme, and then followed by the Joseph proposals, which became the Act of 1973. We still believe that it would have been better to preserve that Act and persevere with it.
Let me say to the hon. Lady, on the question of rights of women, that she really can claim no monopoly in that respect, as it was that Act which represented a very great advance for working women in this country. We vigorously opposed the repeal of that Act. As a former chairman of the Parliamentary Labour Party put it, we believed that it was a basis upon which we could build. However, the Government had a majority. They repealed the Act. We then had to decide on our attitude to this Bill.
In our 1971 White Paper "Strategy for Pensions", the last Conservative Government said this:
The present state of uncertainty about the development of State and occupational pensions has lasted too long and must be brought to an end. Pension provision can only thrive when there is confidence in the future.
It has been our aim as far as possible to get that confidence into a piece of legislation.
The alternative, frankly, was that the pensions industry would see a situation in which successive Governments achieved nothing in relation to pensions but the destruction of the plans of their predecessors. That would not have produced certainty. That would have produced chaos and would not have been in the interests of anyone.
The main sufferers would have been the pensions industry and millions of men and women who would have found their pensions threatened.
In Committee one of our main tasks was to get terms from the Government to enable the occupational schemes to continue and to develop. In many ways it is the terms that the Government have produced for the occupational schemes that we regard as the acid test of the Bill.
First, occupational schemes depend upon real savings. They are anti-inflationary. The money is actually there to pay for the pension when it falls due. It is money saved. As the Minister said last night, it is deferred wages. In these days particularly, I would not have thought anyone needed to emphasise the importance of that.
Second, occupational schemes provide an invaluable source of finance for industry. If occupational schemes were

diminished, industry would be faced with the problem of finding another source of finance. Given the present position of investment, given the figures and the business intentions that we have seen, I do not think anyone would want to see that happen.
Third, occupational schemes are to the benefit of the public. An occupational scheme is, above all, to be judged by the benefit it provides for the individual member of that scheme. An occupational scheme is capable of being much more sensitive and much more flexible to the needs of the individual than any all-embracing State scheme can be. Good occupational schemes can be of considerable benefit in preserving and maintaining good industrial relations.
There is no doubt that there are some very good occupational schemes in this country. I should like to refer to a very important survey carried out on occupational schemes by the Noble Lowndes organisation. It showed that 88 per cent. of employers now introducing schemes for the first time are introducing final salary schemes, and that 74 per cent. of new schemes have provided widows' pensions on death of the husband in retirement.
From every point of view the preservation and development of the occupational schemes was a cause for which we considered it vital to fight—from the point of view of the individual member of the scheme and from that of the economy. In Committee, therefore, my hon. Friends proposed a series of amendments aimed at this goal, and with the co-operation of the Government I believe that we have achieved considerable success.
There have been major concessions from the Government on the buy-back price for firms which ceased to contract out and when schemes wind up. There have been major concessions on the buyback price for early leavers, and also technical amendments such as that relating to the retirement increments which my hon. Friend put forward this afternoon.
Our aim has been to provide the conditions in which as many firms as possible contract out. The question tonight is whether those conditions are enough to enable them to do so. In this respect


I reinforce and re-emphasise what my hon. Friend the Member for Rushcliffe said last night. He said that we and the right hon. Gentleman have received a letter from the joint working party which was formed to facilitate the exchange of views between the pensions industry and the Government. That joint working party consisted of the Association of Consulting Actuaries, the CIB Society of Pension Consultants, the Group of Nationalised Industries Pension Funds—a significant inclusion—the Life Offices' Association, the Association of Scottish Life Offices and the NAPF, together with the CBI. In other words, it represented virtually the whole of the the pensions industry.
The working party's summing-up of what the Government had put forward was that, while they appreciated that the Government had tabled amendments which recognised the existence of their problems, they did not feel that the immediate conditions for making contracting out a possibility quite yet existed. This again was the point put so well by my hon. Friend this afternoon. There were two suggestions, concerning the five-year roll-on and the suggestion, which my hon. Friend the Member for Brentwood and Ongar made last night, that the incentive in the Bill to contract out is too small.
It would be out of order for me to press further points which are not in the Bill and which were pressed both last night and in Committee. My hon. Friend has put the case very well and fully for an extra incentive to contract out, but that has not been accepted. What the Government have said is that they will look at the first point when the Bill goes to the House of Lords. In essence, the case which has been put by my hon. Friend the Member for Rushcliffe is that there is still an element of open-endedness in Clause 41 and that, when the new actuarial tables are issued a sufficient period should be provided before these come into force, so that companies have an adequate opportunity to pay premiums on the old basis for which they were funded. Therefore they are seeking a five-year roll-on period.
The Minister has given an assurance that he will look at this again and that he has an open mind on the subject. We

urge him from the Opposition side to accept the unanimous suggestion of the pensions industry that he should do that and take a step towards the minimum conditions on which the industry set such store.
Underlying all our talks and deliberations on the Bill has been our concern at the current rate of inflation. This is really the most essential and crucial point of our discussion, and it was significantly absent from everything the right hon. Lady said this evening. The assumption of the Bill remains that average earnings rise by 8 per cent., that average prices go up by 5 per cent. and that occupational schemes will get a 9 per cent. return on investment.
The position at the moment is that the yield on investment is very significantly lower than wage inflation—a point made by the Minister of State on Second Reading. If that continues it will lead to a very serious position indeed for the occupational pensions industry. Since then the position has worsened.
The pensions industry seeks an incentive. In my view, the greatest incentive which could be given is a new effective policy to control inflation. There is some tendency from the Government benches in social services debates to talk as if inflation is not a matter for them. Nothing could be further from the truth. In this Bill we can see the immense dangers that inflation brings. Yesterday the Government brought in their mobility allowance, and I am glad to see that the Minister who is concerned with the disabled is with us. We welcome the value of that provision. Nevertheless, that allowance will be steadily eroded unless we bring inflation under control.
That is the point made by the Child Poverty Action Group in its pamphlet "Back to the 30s for the Poor" in which it argued that inflation would eat up the new social security benefits announced before Whitsun by the Secretary of State. As the Child Poverty Action Group said,
Today inflation is disguising the crisis faced by Britain's poor.
It may be disguising it, but there is no question that inflation is hitting the poor hardest of all.
Let me give as an example the mobility allowance, which is something we welcome in principle. The allowance was


announced in September 1974 at a figure of £4. It has now been put up to £5. The Government sought to claim some credit for that. Yet inflation has already eroded this benefit. If inflation continues at its present rate—the rate that we have experienced for the past six months—the mobility allowance of £4 announced in September 1974 will need to be £5·64 to retain its original value when it is introduced on 1st January 1976.
That is the measure of our inflation. That is the measure of the problem facing the nation and in particular facing those who are most vulnerable. That is one measure of the crisis facing us, particularly the poor and the disabled whom successive Governments have sought to help. There is no monopoly of concern here. There is a crisis facing the pension funds. Inflation is affecting the individual member in the schemes, the level of savings and investment in the schemes and the very existence of such schemes. If the Bill is to be successful, inflation must be tackled now.

6.43 p.m.

Mr. David Penhaligon: I cannot be as complimentary about this Bill as other hon. Members have been. I have struggled as best as I can in Committee and in the House to understand the great arguments between the pensions industry and the Government. There have been occasions when I have not fully understood those arguments. That put me in the majority because there have been times when the discussions have been extremely complicated.
In an attempt to examine the matter generally I went back to the original White Paper "Better Pensions." The line from that White Paper to which I would like to draw the attention of the House is under the second heading on the first page dealing with dependence on supplementary benefits. It says:
Of about 8 million retirement pensioners—some 2 million—or about 25 per cent. also receive a supplementary pension.
Widows form the largest part of these and very nearly 60 per cent. of widows are on supplementary benefits.
The White Paper goes on to say that in the opinion of the Government there are probably another million pensioners either just over the supplementary benefit

level or able to claim supplementary benefit if they wish, even though it might be a small amount.
In the next paragraph the White Paper says, and I totally agree:
It is wrong that such large numbers of pensioners should have to rely on supplementary benefit.
Understandably, men and women resent the fact that after a lifetime of work and service to the community they have to rely on this type of assistance to keep them out of poverty.
Although I may not have understood some of the clauses I did understand Clause 6. This deals with how the money which the Bill will bring into the pensions business will be distributed. As the years pass the percentage of people retiring on supplementary benefit will decrease. It will never totally disappear.
For those who have now retired the Bill is not good enough. The Government claim that they will increase the basic pension in line with average earnings, and I believe that they will but that means that the poorest in our society, those who are either on supplementary benefit or just around that level, will experience no real improvement. The disappointing thing about the Bill is that it condemns these people to this situation for the rest of their lives. There are some good aspects of the Bill, but this one means that if a person retires on supplementary benefit he or she will die on it.
The amount of money involved in the Bill is an enormous percentage of total Government revenue. We have committed ourselves to a structure of expenditure it will be difficult to change. Let me examine some of the expected final situation payments. This Bill will give the average wage earner in this country a man earning about £55 a week, if he has done his full years of service, a basic pension of £11·60, his wife's pension of £6·90 and a supplementary allowance of £11. These are in April 1975 terms. The total figure will be £29·50, which is a great deal better than anything we have had for a long time. That point is worthy of recommendation.
However, the pensioner who has been retired longest will be on the smallest income. I would have liked to have seen a proportion of this additional component


gradually being built into the basic pension. If the additional component were an average £7 a week instead of £11 it would mean that we could give £4 to the basic rate. The person in the average position would be no better off while the £80 a week man in April 1975 terms would be £4 a week worse off, but those people to whom the White Paper referred would receive a real increase in their pensions and hence in their standard of living. It is regrettable that we have committed so many people in society to retirement on supplementary benefit.
I am delighted that we have reached the end of the rail in the great pensions debate. I am a recent recruit to this House and so have not had to survive the previous Bills. In 40 years' time this Bill will still be the basic legislation on which we calculate pensions. By that time people will begin to see that it is good, but I am afraid that we have condemned an enormous number of people to a supplementary benefit existence for the rest of their lives. We have done that because we have increased the amount of money that the public will have to provide towards pensions to the maximum figure that it can be imagined they will stand. There will be no transfer of money as the years pass to increase the living standards of those now condemned to supplementary benefit.

6.56 p.m.

Sir Brandon Rhys Williams: Unfortunately, because of commitments to another Parliament I have been unable to make any serious contribution to the long debates on the Bill, although that may not be a matter for regret because the House has heard me on the subject of pensions to such an extent on previous Bills that my views are well known.
I was pleased to hear the Secretary of State speak of the harmony that has been achieved on the Bill because that is the most important thing we have to achieve if we are to do our pensioners the good they deserve. I am delighted to see that it has indeed been achieved in the closing stages of the Bill.
However, we must remember that we are still treating our pensioners in Britain in a most deplorably inadequate and

mean way; so that the House must not be satisfied, even though we now almost have a framework in the shape of an Act. Inflation is eroding pensioners' benefits every day. We have come to a crossing point, like the change from Newton's physics to relativity. We have to explore a complete new world in establishing the basis of the relationship between the working population and the population of retirement pensioners. In the old days, relationships were based on hard arithmetic; the arithmetic may have been too hard, but at any rate it was comprehensible. Now the relativities have to be thought out afresh each year—even each month—in order to decide what we owe our pensioners.
However, if we are unable to return to the elementary or even the advanced principles of arithmetic and actuarial calculations we must clarify our concepts of the moral principles of entitlement. I was glad to hear the Secretary of State refer to self-respect in old age, which we certainly must hold on to. I also think she has done no harm in striving to establish a unisex basis for pensions. I have had a sneaking sympathy with what she has been trying to do, although I felt that she was premature for two reasons. First, we do not yet have equal pay for women and, secondly, we have not yet established the basis of reward for the woman who works in the home. Therefore, there are, about the way in which we reward the female population, two enormous problems still unsolved. To hurry ahead on the pensions side was a little premature. Nevertheless, the time will come when the work that the right hon. Lady has done on this will be accepted as part of an integrated and satisfactory pensions scheme.
I have referred so often to the root of entitlement that right hon. and hon. Members laugh at me now. However, it is important. I welcome the Bill because it separates the citizenship element, which is basic and universal, from the earnings-related element, which has to be calculated for each person in relation to his life's contribution. It is because the Bill separates these two principles that Governments in the future will be able to change the structure of the benefits without destroying the scheme itself. This is all-important. In the Crossman Bill it was not possible. As soon as we


started to tinker with the edifice the whole thing was destroyed. In the Joseph Bill it was certainly possible, but other changes, notably inflation, made it difficult to proceed.
Now we have a Bill that will soon be an Act. The pensions dispute will come to an end—except in one sense. The House still has a tremendous amount of work to do if it is to ensure that the resources allocated to old people are enough. That is a continuing, on-going, daily task for those right hon. and hon. Members who care about this subject.

6.54 p.m.

Mr. Robert Boscawen: As one of the few back benchers who supported the 1973 Act and the 1975 Bill, shortly to become an Act, I am committed to paying my respects to the ministerial and Opposition teams who have brought the Bill through all its stages of great complexity. In spite of the fact that at all times they pleaded that it was a simple Bill and that they were trying to treat and expound it with the greatest simplicity, it is, perhaps, one of the most complicated Bills the House has ever seen. I pay my respects to the ministerial team and to all those who backed it up, because a vast amount of work was involved in bringing the Bill to a fruitful conclusion.
The Bill has achieved the aim of a civilised pensions scheme in a modern society, namely a guaranteed, inflation-proof pension with equal treatment for women. The secondary aim was to achieve a partnership between the private sector, the pensions industry, and the State. We shall have to wait to see whether that partnership will work and endure. First and foremost, it is up to us and to the industry to ensure that it endures, because if it does not the whole scheme will fall apart and be far too expensive to work. It is vitally important that in the years ahead whatever party is in power listens not only to the industry but to other back benchers, so that the partnership between the occupational pensions sector and the State sector works for the rest of the century.
I congratulate both Front Benches on their harmony. I did not share it all the time, as hon. Members know, because I wished to maintan the privilege of a

back bencher to move a lot faster, further and quicker than the Front Benches.
The pensions Bill should have done more for existing pensioners, especially those on supplementary benefits. I know—and the Minister of State has explained this to me on a number of occasions—that there are powers within the Bill to bring existing pensioners within the earnings-related additional element at an earlier stage than would be the case purely through their contributions. I am sure that Conservative Members will be pressing for that as soon as economic conditions allow. It is because I want to see that take place as soon as possible that I object to part of the Bill.
All hon. Members agree that this is a remarkable achievement. It has progressed with harmony and is a substantial step forward. I hope that it will be successful.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — MEMBERS' INTERESTS

6.58 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I beg to move,
That, pursuant to the Resolutions of the House of 22nd May 1974, this House agrees with the recommendations made in the Report of the Select Committee on Members' Interests (Declaration) relative to the arrangements for the registration of Members' Interests, and with the recommendations contained in paragraphs 43 and 47 of that Report in relation to the declaring of such interests; and that a register of such interests be established as soon as possible in accordance with the proposals made in that Report.

Mr. Speaker: In case any right hon. or hon. Members were not here earlier in the day, I repeat that I have selected the amendment to the motion, after the second "Interests" 'Interest', insert:
'with the addition of Item 10 to the Form for Register of Interests in Annex 3, whose text shall read "10. Any other interest which the Member declares in accordance with the purpose of the Register as agreed by the House and set out in the accompanying letter to this form."'
I have also selected the amendment, after 'notice', insert:
'other than that of a question in relation to which the Member giving notice thereof has an interest which is recorded in the register'.
to the second motion which reads:
That, for the purposes of the Resolution of the House of 22nd May 1974 in relation to disclosure of interests in any proceeding of the House or its Committees—

(i) any interest disclosed in a copy of the register of Members' Interests shall be regarded as sufficient disclosure for the purpose of taking part in any Division in the House or in any of its Committees;
(ii) the term 'proceeding' shall be deemed not to include the giving of any written notice, or the asking of a supplementary question.
The motions and amendments can be discussed together. Before ten o'clock it will be necessary for the first motion and amendment to be moved. After ten o'clock the second motion can be moved formally, together with the amendment. There will be an opportunity to vote on both amendments and both motions, but there can be no discussion after ten o'clock.

Mr. Short: The House will recall that the Select Committee whose report we

are considering today was set up following an earlier debate on this subject on 22nd May last year. On that occasion the House agreed to three resolutions.
The first approved the formalisation, with some widening of scope, of existing parliamentary practice with regard to the oral declaration by Members of relevant pecuniary interests and benefits. The second resolution, the major resolution, agreed in principle, for the first time, the establishment of a compulsory written register of Members' interests. It was in order to follow up the implications of these decisions that the House then proceeded, by a third resolution, to establish a Select Committee.
The Committee's remit was to consider what types of pecuniary interests or benefits should be included in the register; the administrative arrangements for the proposed register; the procedures by which the resolutions of 22nd May should be applied and enforced; and whether any other classes of persons besides Members should be required to register their interests.
Today's debate, therefore, on the Committee's report, is not I emphasise "not"—on the general principle of whether there should be a register of Members' financial interests; or whether this should be voluntary or compulsory; or whether or not the contents of a register should be made public. These general issues have already been decided by the House. What today's debate is concerned with, therefore, is the Committee's recommendations as to how these general principles should be put into effect.
As regards the register itself, the Committee's report falls under two main headings—the proposed scope of registrable interests and the administrative arrangements for the compilation and maintenance of the register.
As to the scope of the register, the House will be aware that it has been strongly urged throughout the protracted consideration of this issue that it was impossible for any register of Members' financial interests to be comprehensive, because the term "financial interests" is an indefinable term, and that any limitation of a register to certain specific definable types of financial interest would be bound to be unfair as between Members with different kinds of interests. The


previous Select Committee on this matter, under the chairmanship of my right hon. Friend the Member for Vauxhall (Mr. Strauss), took this view, and came down accordingly against the idea of a register.
To meet this problem the present Select Committee has proposed nine fairly broadly defined classes of pecuniary interest or other benefit which Members should be required to register. The amendment tabled by my hon. Friend the Member for Newham, South (Mr. Spearing) would add a tenth residual category, and I certainly would not oppose its acceptance by the House.
The Committee states its aim to cover all the classes of pecuniary interest or benefit which might reasonably be thought to influence the conduct of Members of Parliament.
But it has fully recognised, as did the previous Select Committee, that such a list cannot be entirely comprehensive. As the Committee point out, the House can lay down only
broad guidelines within which Members should proceed with good sense and responsibility.
In the end, final responsibility rests on the individual Member himself, and must do so, to disclose any interest, whether or not it is within these nine specific classes of registrable interests, that might affect his parliamentary actions. I emphasise that the register is supplementary to, and not in place of, the obligation on a Member to declare his interests whenever the occasion arises.
For the same reasons, and bearing in mind also the need for Members to retain a reasonable degree of personal privacy—it is very important that hon. Members should retain a reasonable degree of privacy—the Select Committee has not attempted to lay down precise financial limits within which particular forms of financial interest would need to be registered. For example, a Member would be required to register only the general nature of a property interest rather than a detailed list of holdings.
The Select Committee recognises the risk that in some instances this may be construed as woolliness or unsatisfactory vagueness. But the House will want to consider whether some degree of imprecision is inevitable if Members are to

retain the final responsibility for judging whether or not a particular interest, of whatever nature or amount, should be disclosed to the House, and if Members are to be allowed a reasonable degree of privacy in the handling of their own personal financial affairs. For example, it would seem inevitable and right, as proposed by the Committee, that Members should be left to judge for themselves whether benefits received from an overseas Government are material or not.
As regards the administrative arrangements for the register, the recommendations made in the report are, I think, fairly straightforward. It is recommended that the day-to-day administration of the arrangements for the register, its compilation, access by the public, and so on, should be the responsibility of a registrar, who should be a Clerk of the House. I am sure that the Select Committee is right in its judgment that the essential qualification for this post must be that the registrar should have a long experience of personal dealings with Members and should command their confidence.
The report also recommends that a permanent Select Committee should be established to which points of doubt or difficulty could, if necessary, be referred on a quite confidential basis. If these motions are approved by the House, the Government will bring forward as soon as possible the necessary motion for the establishment of this Select Committee.
Perhaps I may briefly draw to the attention of the House three subsidiary aspects of the report which are reflected in the wording of the second motion now before us. These relate to that part of the Committee's remit which was concerned with the procedures by which the resolutions passed last year should be applied.
The first of these concerns voting procedure. The resolutions passed by the House on 22nd May last year provided that a disclosure of any interest was required in any "proceeding of the House", and whether or not the interest had already been registered. This would, of course, include voting. The Select Committee recommends, however, in paragraph 48, that this would be impracticable in the case of voting. It therefore proposes that, as provided for in the first part of the second motion, the


registration of an interest should be sufficient disclosure for the purpose of taking part in any Division.
The second matter of detail concerns a similar point arising on the giving of written notices. Strictly interpreted, the resolutions passed last year would mean that if a Member had a relevant interest, this fact should be indicated in any notice which he tables—I repeat, any notice—whether a Question, a motion, an Early Day Motion or an amendment to a Bill, or any other kind of notice. The obligation would exist whether or not the interest had already been registered.
As the House will readily recognise, the printing complications of such a procedure would be considerable, particularly in cases when, for example, a considerable number of Members had appended their names to a motion or an amendment. When an interest had not been already registered there would be the problem of agreeing with the Member, possibly at very short notice, the text of the declaration of interest to appear on the Order Paper.
The House will be aware that the Select Committee itself, in considering, at paragraph 45 of its report, the problem of disclosure in relation to Questions, referred to the inconvenience and loss of time which could arise over what it describes as "this cumbersome procedure".
In the light of these difficulties, the second part of the second motion on the Order Paper, that defining "proceeding" for the purposes of the resolution passed last May, would have the effect that an interest would not have to be disclosed in tabling a written notice, whether of a Question, motion or amendment. Such an interest could, of course, have already been registered, and, if he considered it necessary, a Member could still disclose orally a relevant unregistered interest, when, for example, a Question which he had tabled was answered. We can see from experience how this works out in practice.
The amendment put down by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) covers, I think, the only case which would cause little or no administrative difficulty—namely, the marking of notices of Questions, where the interest has already been recorded in

the register. Although this could perfectly well be done if the House were so to decide, it would seem to me somewhat illogical to make this provision, limited as it would be to one class of written notice for which no special consideration of principle applies which is not equally applicable to all other classes.
The third point of detail concerns supplementary questions. The Select Committee, at the end of paragraph 45, points out that if interest had always to be declared when asking a supplementary question the effect would be cumbersome. It would obviously slow up Question Time.
The second motion accordingly proposes this further exclusion, that of supplementary questions, from the scope of what constitutes "proceedings" for the purposes of last May's resolution. Again, it would still be open to the hon. Member to disclose an interest when asking a supplementary question if he felt it necessary to do so.
These are the points of detail to which I wanted to draw the attention of the House.
In conclusion, I should like to pay a tribute, on behalf of the House, to my right hon. Friend the Member for Sunderland, North (Mr. Willey) and his Committee for this report, which I think is an excellent one. I would emphasise that the Government, like our predecessors, fully recognise that this subject is very much one for the House rather than the Government. No procedural provisions or register of interests can, of course, be a guarantee against deliberate evasion. But in the Government's view the recommendations made in this valuable report offer the House a workable, sensible way of providing hon. Members with the opportunity in future to forestall unjustified criticism and to help allay public concern, while at the same time enabling them to retain—and I say again that I think this is important—a reasonable degree of privacy in their financial affairs. In the words of the report, a Member is
at all times answerable to the vigilance of his fellow Members and the public.
But the arrangements for the register proposed in this Report and embodied in the Motion now before the House should
serve him and them in the discharge of his responsibility.

Mr. Speaker: Before I call on the right hon. Member for Sunderland, North (Mr. Willey) to speak I should say that I have 18 hon. and right hon. Members who wish to speak in this debate and it is only a short debate.

7.12 p.m.

Mr. J. Enoch Powell: When the House in the previous Parliament passed the resolution upon which was founded the work of the Select Committee and the motion now before the House I was in the course of a retirement which turned out to be only a brief sabbatical, but I have studied with great care the proceedings and the debate at that time.
The right hon. Gentleman the Leader of the House is, of course, quite right formally in saying that the principle was decided by the House on 22nd May last year and that we are only concerned this evening with the machinery. But, if we disagree with the machinery, then that is a way in which we can revise our view, if we desire to do so, as to the principle. And indeed it seems to me that there is a great contrast between the background and atmosphere in which we are sitting tonight and that which surrounded the earlier discussion on this subject. It is often the experience that quite suddenly a subject becomes of almost overpowering interest, if not to the House itself, to the Press and the media—more to the Press, usually than to the public at large—and the House feels impelled to some extent to give way, against its better judgment, to that clamour, but always reserving, for we have a sort of instinct of self-preservation, the means of reconsideration at a later date.
That seems to me exactly what has happened here. There was, indeed, a state of near hysteria about the subject of Members' financial interests a year or so ago. It arose out of certain incidents which today are almost forgotten. It is difficult to reconstruct that atmosphere. And it lapsed again as suddenly as it arose. So I submit to the House that we are not only entitled but have a certain duty maturely to consider once again what we are doing.
The resolution of last May was passed by the approximate ratio of two to one. There seems to be something familiar

about that ratio. I have read carefully the list of hon. Members in the "No" Lobby in that Division and I notice, in the words of St. Paul, that although "some are fallen asleep", many "remain unto this present". I hope, therefore, that they will not have changed their view on this matter of principle and that the House will have the opportunity of dividing upon the first motion later. Not that I believe that even that will in fact, if the general mind of the House is changing in this respect, necessarily settle the matter finally.
In that event I shall vote in the "No" Lobby, for two separate and distinct reasons: first, because I believe the proposal is ineffective and degrading, and secondly, and quite separately, because I believe it is unlawful and unconstitutional. And now I will endeavour briefly to make good these two propositions.
It is, of course, and always has been from time immemorial, a matter of honour in this House that in our own discretion and on our own responsibility we declare, where it is fit that it should be declared, any interest which might be thought to bear upon the advice which we are giving or the part which we are taking in proceedings. That cannot, and the Committee's report recognises this fact, be other than a matter of honour, and no arrangement which we make can alter that. We cannot change what is a requirement of honour into a mere formality of registration. So imperfect—and again the Committee has recognised this—are the proposals for registration—the Committee has certainly done its best; I do not think anyone could have done better with the problem which it was set—that at the end it remains a matter of the discretion of the individual Member what he would register and how.
So we have to ask whether by what we are doing we are giving hon. Members any security, any protection, against false imputations, and whether in fact we would not be safer against the imputations which will be made in any case from time to time, if we relied upon the time-honoured assumption that we behave honourably in this House. It is an assumption which is accompanied by a safeguard. We do not live or debate as strangers to one another. A sufficient number of hon. Members know very well quite enough about the background


of their colleagues in this House to judge what motives and what credibility may attach to the contributions which we make to debate. This is a place where, whatever we may individually think, we walk about as naked and as visible as if we were under some kind of imaginary X-rays.
So the idea that the register will disclose astonishing facts about Members of this House of which the rest of us have been ignorant and which, either dishonourably or in a fit of amnesia, those hon. Members had not happened to mention, is really an absurdity. There is no serious danger that the decisions and the deliberations of this House will be perverted by the failure of an individual here or there, whose failure will be known by many at the time, to disclose, as in accordance with our traditions he ought to disclose, his interests. By introducing a registration procedure which purports to secure the disclosure of interests although it cannot effectively do so we degrade ourselves by implying that our honour and our traditions are not adequate to maintain proper standards in this House.
Inefficacious the procedure is, and riddled with lacunae. The Member is required to disclose the interests of himself, his wife, and his children, but the interests of his wife only in so far as he is aware of them. Fancy that! That practice will not serve when one is making a report to the Inland Revenue. It is no good saying to the Inland Revenue "My wife did not happen to tell me and, of course, I did not ask her".
Even so it is an absurdity; for if an hon. Member is going to be swayed and perverted by pecuniary interests, there must be taken into account the pecuniary interests not only of his wife and his children but of his in-laws, his parents and all manner of relationships even within the bounds of consanguinity. Once the suspicion enters that the potential or contingent financial interests of a Member are perverting his judgment in this place, despite his failure to declare them, nothing that is proposed under the recommendations of the Committee or under the resolution can in any way remedy that.
So we give much and we gain nothing. We give up the conviction in our own

integrity and the assertion of our own integrity and we gain in exchange no safeguard but only a concatenation of absurdities. It will be understood that no criticism either of the Chairman or of any member of the Select Committee is implicit in anything I say.
So the proposition is degrading and ineffective; but there is a more serious aspect. The House has an absolute right to regulate by resolution its own procedures. Therefore, although I do not like it, I take no exception in principle to the first of the resolutions which was passed on 22nd May last year and which turns into an order of the House what was previously a convention of the House. There can be no authority which regulates our procedures and the manner in which we conduct our business other than this House itself, and to that authority we all owe obedience. But that is not what we are purporting to do here.
What we are purporting to do by this resolution is to create a binding condition for being a Member of Parliament. We are introducing a new qualification to be fulfilled before a citizen who is elected a Member of Parliament can operate as a Member of Parliament. That was remarkably clearly recognised by the hon. Member for Sowerby (Mr. Madden)—I indicated that I would quote his speech—who, in speaking last year in favour of the proposals said:
It is necessary for constituents to know their representative's financial interests, because inevitably from time to time conflict could arise between interests, and an hon. Member's Interest could determine his action."—[Official Report, 22nd May 1974; Vol. 874 c. 501.]
So the resolution that we are considering is not for the purpose of regulating our procedures and ensuring that hon. Members comply with the traditions of the House; it is for the protection of the public. If we agree to it, it is because we consider it in the public interest that the interests of hon. Members should be known.
If that is so, it is not possible to stop there; and what I am asserting is borne out by the last paragraph but one of the report of the Select Committee, which agrees with the discovery that this rule could not stop with Members of Parliament. If it were to be applied to Members of Parliament, the report suggests


that it must be applied to candidates also. In other words, it is the representation of the people for which we are seeking to legislate by a resolution of the House. We are saying that no one should seek to be a Member of Parliament, and no one is fit to sit and speak and vote as a Member of Parliament, who does not comply with the condition of completing an entry in a register. That is something that the House has no power to do. We have no power to alter the law of the land by a resolution of the House. We have no power to attach any further conditions than already exist in law and custom to the right to be elected a Member of the House.
We are purporting to change the law of the land and restrict elegibility to the House by a mere resolution of the House. That is unconstitutional; for it confuses the effect of a resolution of the House, which is internal to the House, with legislation, which changes the law of the land and in which the House only participates.
Sir, I do not think that the most venomous of my enemies could or would accuse me of having ever been failing in my respect for the House. Indeed, if I have been at fault, it is in having been an extremist in my idolatry of the House. I might say in the words of the Psalmist:
The zeal of thy house hath eaten me up".
Yet I have to tell the House candidly that I shall not consider it right to comply with this order of the House if such an order is made. I say that, because I consider it to be an unlawful order and an unconstitutional act on the part of the House, which cannot and should not be binding upon its Members.
However, I do not believe that what I have felt obliged to say will come about in practice; for it is my conviction that with the assistance of the Select Committee and the effiuxion of time we have somehow argued our way through to the realisation that our first thoughts in this matter were mistaken, that we have entered upon a field where we can achieve no good by the making of resolutions and that by some method or other—the House is very wise in discovering methods of extricating itself from embarrassment—this is an episode which we shall do best to leave behind us.

7.28 p.m.

Mr. Frederick Willey: I must regret one remark made by the right hon. Member for Down, South (Mr. Powell). He well knows that the House greatly respects him as a House of Commons man. I hope that he will not be wilfully defiant in the way he suggested. I cannot continue in debate with the right hon. Gentleman because I am circumscribed by my membership of the Select Committee. We had to implement the resolutions of the House.
I pay tribute to the members of the Select Committee who reflected a sharp difference of opinion about the resolutions which the House carried. For that reason I believe the report has proved generally acceptable. It was because the Select Committee recognised the various views yet sought a reconciliation that we managed to present a report that generally has been acceptable both within and without the House.
I must make two more preliminary points. First, I owe an apology to my hon. Friend the Member for Nottingham, West (Mr. English). I said in evidence that we intended to publish a report prepared by a group of the Parliamentary Labour Party, and by an oversight that was not done. I rather regret that omission as it would have shown that the Select Committee took a much more comprehensive view than the group of which my hon. Friend was a member.
The second point is that we were instructed to report within the shortest possible time. If there are any imperfections, we can claim that we worked expeditiously. We certainly worked more expeditiously than the House. Our proceedings were interrupted by the General Election, but we have waited a long time for the House, as I hope it will tonight, to endorse our views.
I say briefly, in the context of implementing the resolutions of the House, how we saw the problems before us. First, I deal with the register. The Committee came to four conclusions about the register, some of which have already been mentioned by my right hon. Friend and all of which are important. The first is that the register is supplementary. It does not displace the obligation to disclose. If we recognise that, we can take a more relaxed view of the register than


would otherwise be taken by some Members.
The second conclusion, which really follows upon the first, is that the register's purpose is to record generally and to give public notice of such pecuniary advantages or benefits as Members may enjoy that might be seen to have a bearing on their parliamentary work. At the same time, we recognised Members' right to privacy. That is very important in view of what the right hon. Member for Down, South has said. We felt that there is a great deal of concern both inside and outside the House about privacy. It is something which we are entitled to enjoy as much as anyone outside the House.
I must say to my right hon. Friend the Member for Vauxhall (Mr. Strauss) that we respected the views of his Select Committee. We were anxious not to institute proceedings which were unduly inquisitorial. My right hon. Friend's Committee had a fear that if we embarked upon a register, it would be an inquisitorial procedure. The Committee were conscious of that fear and were anxious that that should not be the nature of the register. When we approached the register we provided for the general obligation of Members which we define in our report. That is a binding general provision involving all Members who complete the form which will in turn constitute a register.
My hon. Friend the Member for Acton—or, I should say, Newham, South (Mr. Spearing) has raised a point which my right hon. Friend says he will recommend the House to accept. I do not think that it is a point of great substance. My hon. Friend was a valuable member of the Committee. My recollection is that the matter was covered adequately by the general provision to which I have referred. However, if my hon. Friend has had second thoughts about this matter I am sure that they will be acceptable to the members of the Committee. It seems that my hon. Friend's point has the practical advantage that it may provide another place for Members to make their returns. I must emphasise that we made it clear that the general obligation was imposed by the House and that Members would be subject to it. It is in the context of that

general obligation that we specified nine classes of pecuniary interests or benefits. I need not deal with them in detail as they are set out in the report.
I think that the Select Committee would agree that we gave considerable time to discussion and deliberation of the nine classes. In spite of that, we would not pretend that they are not imprecise and indefinite. However, they are as comprehensive as we could devise them. In so far as they are not sufficiently precise or definite, the important thing is that we have provided a parliamentary solution to the problem which faced the House. The essence of our proposals is that there should be a permanent Select Committee to be responsible for the register, to deal with complaints and, equally important, to keep the provisions under constant review. If such a review is maintained and if we find in the course of experience that a definition is too imprecise or that it should be less precise, the matter can be dealt with in the proper manner by a Select Committee.
As I have emphasised, the declaration of interests is a provision on which there remains an obligation regardless of the register. All we have done is to recommend straightforward proposals to implement the resolution of the House. As my right hon. Friend the Leader of the House has said, there are two particular difficulties. There is the difficulty of voting, and the Government have recommended what we felt should be done to regularise the position.
As regards supplementary questions, we had to make our recommendations because we were bound by the resolutions of the House. It seems that what we were obliged to recommend was cumbersome procedure. I can see no difficulty in its not being required if the House so wishes. Further, there need be no difficulty as regards written notices. If the House so wishes, let us not have procedure more cumbersome than may be necessary. I emphasise that this is a matter which can be constantly reviewed if it is felt, in the light of experience, that we should return more meticulous provisions.
The final matter which is not before the House but which was before the Committee is whether we should extend the provision beyond Members of the


House of Commons. We decided against doing so. We found lobbyists too difficult to define. We found no evidence of any demand for the registration of interests of parliamentary journalists, but if any should be listening we saw no practical difficulty in doing so if it were felt necessary. That is a matter that can be considered at any time by the Select Committee.

Mr. John Stokes: The right hon. Gentleman has said that there was no demand for the registration of lobbyists and outsiders. In my submission, there is no demand for all this cumbersome machinery to register Members' interests.

Mr. Willey: I have explained that we were bound by resolution of the House. I have not checked whether the hon. Gentleman took part in the Division. As regards the close relatives of Members, we expressed ourselves very much in the light of what we felt about the general issue of privacy. On shareholdings we made it clear that whilst the holdings of relatives would be brought into account they would not be declared as such. We said that we would regard the disclosure of interests of spouses and children as an unnecessary invasion of privacy for which there is no justification.
I know what some people say about the issue of the register containing the interests held by relatives and the suggestion that the Select Committee should reconsider the matter, but the evidence before us did not sustain the allegations that were made. The right hon. Member for Down, South has referred to parliamentary candidates. We said that it was unfair that at the next General Election, for instance, those Members who offered themselves as candidates will have all their interests exposed. The same conditions should apply to candidates generally. This is a matter for legislation and for Mr. Speaker's Conference. The Committee recommended that there should be legislation before the next General Election. Possibly that is a matter demanding great expedition. I sympathise with the right hon. Gentleman. I accept that there is unfair discrimination between candidates and I would much rather the disclosure be across the board.
That is our report, and it is unique experience for a Select Committee to have

Government support for the entirety of its report.

Mr. Michael English: I would be glad if my right hon. Friend would mention publicly two matters which we discussed privately and which he mentioned at his Press conference. It is rather important that we get them on the record.

Mr. Willey: I was responding to Mr. Speaker's plea for us to be brief. However, to put it on the record with regard to the classes of interests 7 and 8, I emphasise that these are very comprehensive and include organisations and persons apart from foreign Governments, and include even land and property.
I think the great merit of our recommendations is that they provide a parliamentary solution and that with the good will and co-operation of the House—I hope that the right hon. Member for Down, South will think again about his action—they will work effectively and become a part of our established procedures.

7.42 p.m.

Mr. William van Straubenzee: On this of all occasions it is obviously necessary for anyone taking part in the debate to declare an interest, and I therefore declare a full pecuniary interest in at least three of the headings which will be registrable if, as I hope, the House agrees to the motions which are now before us.
My answer to the right hon. Member for Down, South (Mr. Powell) is that it is splendid to have this reverence to the House, which I hope is not peculiar to him; but the House, like other great institutions, is a living institution which changes and moves with the times. It must therefore adapt its procedures according to the changes of the times.
One of those changes is that, under successive Governments, Government and Parliament have increasingly interested themselves—some would say interfered—in the mechanisms and details of every kind of commercial and industrial enterprise. These include banking, insurance, commerce, the professions and such things as the railways. Increasingly, therefore, those who run such concerns are correctly and properly being required to be advised about the proceedings of


this House and its Committees. Increasingly, therefore, they are obtaining advice from hon. Members on both sides of the House. That is a new feature.
Many of those who draw outside incomes are unable to do so privately. I am—and here comes my first declaration of interest—a practising solicitor. I am not permitted to practise secretly as a solicitor. Any hon. Member can go to the appropriate register and see in which firm I am a partner and where the offices in which I practise are situated. In a modest way I am also a director of some small companies, and I cannot be a secret director. Quite rightly, I can be looked up and the details of my interests can be seen in an appropriate register. However, I am also unashamedly an adviser to a firm which undertakes for clients who are publicly on a register exactly the sort of advice with which I opened my speech. There is no public register of any kind at present, other than that which is voluntarily subscribed to by firms of repute like the one I advise, upon which my name can be ascertained in that connection by anybody.
As a Member of this House I must therefore subscribe to the views expressed in the Committee's report:
A Member of Parliament must expect to be subjected to thorough public scrutiny in the performance of his public duties.
As life has changed and as Parliament has increasingly required industry, commerce, banking and business communities of all kinds to be advised, so it is proper for all those authorities in turn to require technical advice from probably the best source, and that is from hon. Members. I cannot see anything wrong in that, but it is undesirable that it should in any way be done secretly.
I do not know whether I am the only Member to whom this has happened, but not long ago I was approached by a firm in my constituency and was asked to be on its payroll with a retainer of £500 a year. I do not know what angered me more, the fact that it was thought that I could be bought for £500 a year or the expectaton that I would accept payment from a firm in my constituency. The practice of accepting money from within one's own constituency is something to which I should not want to subscribe.

Of course there are hon. Members—and they are very honourable Members whose personal integrity I do not question—on both sides of the House who do not regard this practice as improper. Whatever view is taken of it, it should be clearly stated on a record to be seen by all.
The critique made by the right hon. Member for Down, South that there is something rather woolly in these proposals is fair. The right hon. Member for Sunderland, North (Mr. Willey) conceded that. Let me give an example. Solicitors, who are under a rather special duty not to disclose the names of their clients, must do so only where the retainer arises out of or is related in any manner to their membership of the House. It so happens that the closest I have so far been to a tricky situation arose out of a professional connection, which clearly I can in no way identify, in which a substantial sum of money was involved. It could turn one way or the other upon a decision of the House. I can do only what any other hon. Member would do. I have studiously avoided asking any questions or writing to any Ministers about the subject. If the matter comes to a vote I shall write to my Whips advising them that I shall be absent for some reason or other, but the point is that I am not retained professionally, directly out of or arising from my membership of the House.
Let the House be clear that this is not necessarily a safeguard. I am sad that the Committee therefore so specifically in paragraph 15 singles out public relations firms for the disclosure of names. I am sad that the Committee should almost have made that a dirty word. It is preferable that the names should be properly disclosed. I am sure that good practice requires that they should be on a register of the appropriate professional body to which most of them subscribe.
Let no hon. Member be under any doubt that under paragraph 25, in the reference to shareholdings, the size of a shareholding is not important. I am trustee to only two shares which are totally pivotal shares in an operation which was of such a magnitude that when I took them on for an old friend in special circumstances I felt it necessary to obtain clearance because at that time


I was a Minister. I have no beneficial interest of any kind in those two shares. I might yet find myself in a tricky public situation if I were a beneficiary, which I am not. I do not think that I would come within paragraph 25. The size of shareholding is not all that necessary.
I hope that we shall pursue paragraph 52 a little further. I blame myself that I did not offer evidence to the Committee, although I do not think I should have been very keen to do so. Let us be clear that a considerable number of those who call themselves "the Lobby" in the Press Gallery accept retainers from all sides and all kinds of outside bodies, some of them somewhat odd. I expect that their employers do not always know that those other interests exist. It is partly because I have lived in this world that I have unravelled some of these strange connections. I do not mind, because I stand for a system in which people should be able to do this, provided that it is on the record and is done publicly.
However, we must remember that many of these people—many of them women and some my personal friends—have special facilities which they enjoy in this House. They come to parts of the House which are specially restricted only to them. They occasionally drink with us—and in my case more than occasionally—in agreeable company and they are bound to hear Ministers and members of the Opposition in moments of relaxation and in that way pick up useful tips. Surely they should be subject to some of the restrictions which I trust we are about to impose upon ourselves.
Because this debate was altered at short notice, I must inform the House that I shall be in difficulty if the debate goes long enough in recording my vote, for which I apologise in advance.
I hope that the Committee's next job, or the job of its successor, will be to draw up a code of conduct. One of its first and most straightforward recommendations should be to the effect that no Member of this House should on behalf of anybody, or certainly anybody with whom he was a pecuniary interest, approach any colleague, senior or junior. It should always be the person for whom he acts who should approach the Minister,

Leaders of the Opposition or Members of this House. That seems to me to be the principal way of going about the matter.
I end by saying that I personally attach the greatest importance to hon. Members having outside interests. I think that it is an important part of the independence of Members of this House. It is most valuable for us to have an independence of the Whips. Whips should always be reminded that they are the servants and not the masters of hon. Members. They should comport themselves accordingly. They do not always remember it.
One of the ways in which that independence can be maintained is for hon. Members not to be dependent on their parliamentary salaries. The problem of this House is that Members are becoming increasingly dependent on their salaries. This means that the power of the parliamentary machine is given added strength. That is not good for parliamentary democracy. I am sorry that there is only one Whip on duty at the moment, but I am sure he will relay my message.
On the general principle, I have no doubt that what is suggested by the Government as a result of the Committee's work is good and should be followed through. It will be good for the general presentation and appearance of this House, and it will improve matters greatly in the public eye.

7.55 p.m.

Mr. Nigel Spearing: I beg to move, as an amendment to the motion, after the second 'Interests', insert
'with the addition of Item 10 to the Form for Register of Interests in Annex 3, whose text shall read "10. Any other interest which the Member declares in accordance with the purpose of the Register as agreed by the House and set out in the accompanying letter to this form."'.
My amendment deals with an administrative point which I shall explain to the House. Before I do so, I should like to express my thanks to my right hon. Friend the Member for Sunderland, North (Mr. Willey) for the way in which he guided us through this difficult subject in Committee. It was a difficult subject, and the fact that Members of different views came to a unanimous decision in the report is greatly to my right hon. Friend's credit. He mentioned me as


the Member for Acton. I was the Member for Acton in the last Parliament but I, like the right hon. Member for Down, South (Mr. Powell), had a short sabbatical and I am now the Member for Newham, South. It was during that short sabbatical that the House brought forward resolutions on this matter and I was not able to vote in the last debate.
The object of the amendment must be read in relation to paragraph 11 which is the pivot on which the report rests. Paragraph 11 contains the following definition:
The purpose of this Register is to provide information of any pecuniary interest or other material benefit which a Member of Parliament may receive which might be thought to affect his conduct as a Member of Parliament or influence his actions, speeches or vote in Parliament.
The Committee had some difficulty in reaching the nine categories which are then referred to in paragraph 13. Indeed, matters of definition on this subject are difficult indeed. What we have always tried to do is to go back to a minimum definition which was fairly well defined on the understanding that in the last resort the obligation was on the Member. That is why in respect of Annex 3 I thought it right, as an afterthought to add my amendment.
After those nine specific categories, there may be a wish by an hon. Member to declare other interests not covered specifically by these categories. Since the accompanying letter from the Registrar will be sent with the form, it will be unfair of the House not to provide another space to enable any hon. Member to think twice and to add any other interest which he thinks should be registered. If he did not do so, and indeed if the House did not give him that opportunity, it might be that through some activity or other it could be discovered that the hon. Gentleman had some interest which, had he had cause to think, he might have declared. The last section, which has been described as an omnium gatherum, should be there to protect not only the House and the public but the Member himself. We would not be reasonable if we did not provide accordingly.
I shall deal briefly with the remainder of the report, which I feel we must accept.

I do not accept the arguments of the right hon. Member for Down, South, although his speech was an extremely good one. I do not agree with what was said about part-time and full-time Members. One of the difficulties of the argument is that there are only certain reasonably remunerative jobs which part-time Members can take. Those jobs may give them a different impression of the work of the people of this country and indeed the problems of the country, than is gained by those of us who do not have such obligations and who can spend time looking at events completely free of obligation. We can listen to people, we can attend conferences and we can do many other things without any obligation being imposed upon us. In regard to the speech of the hon. Member for Wokingham (Mr. van Straubenzee), I do not think I would have anything to declare under the nine categories.
We must seek to safeguard hon. Members against the situation that faces a person once he or she is elected to this House. It may be that such a person has a business, perhaps family business, which he can maintain along with his membership of Parliament, but we know that on occasions people are asked to undertake financially rewarding obligations by virtue of the fact that they are Members of Parliament. That situation arises time and again, and it affects ourselves and sometimes our friends. That is a new fact in the post-war and new commercial situation in which we find ourselves. Therefore I think, whatever might be the views of hon. Members, that if the onus is placed on a Member to declare what he has accepted as a financial obligation, he will defend that as he pleases.
As regards the question of flexibility, there will be a changing public attitude to this matter The register can take care of that, as can hon. Members as time goes by. That also applies to the question of public confidence. I hope that the matter will recede into the background in general just as it has receded in the House in the past 18 months, as the right hon. Member for Down, South said.
The representations of interests lies at the heart of this matter. We must ask


ourselves why an interest is being represented. We must ask whether that interest is represented by virtue of an hon. Member's position as a constitueny Member of the House of Commons. Any interest or concern which is not related to that primary responsibility but is related to a pecuniary or beneficial interest must be declared. That is the logical way of doing it.
The report should be supported. It is not perfect. It compresses a remarkable consensus of views among those who took different attitudes not only to the resolution in the House but also to how Members conduct themselves in Parliament. I hope that we shall carry the confidence of the public with us.

8.2 p.m.

Sir Michael Havers: I intend to intervene only on the question of the amendment. My hon. Friend will deal with the more general points later in the debate.
I am sorry that the magnificent degree of unanimity which existed so long in the Committee should in a sense be slightly in peril.
I oppose this amendment for practical reasons which I think I should express to the House. As the Leader of the House said, there is a residual category which the amendment seeks to cover. But the final responsibility must always lie with the Member of Parliament. As happens with legislation and decision in courts, some degree of certainty is essential. The words of the amendment
in accordance with the purpose of
mean "in the spirit of". They reflect the intention of the Select Committee. The intention of the Select Committee must be reflected.
I see a difficulty arising at this point. Different views may be taken and uncertainty will therefore follow. It is true that the register can be consulted. But I can see the matter being sent back time after time to the Select Committee for its advice. I do not think that that is necessary, since paragraph 11 provides all that is required. Many hon. Members have said that the Members of Parliament should not be exposed to criticism as a result of the existence of differing views as to what should be registered. Some may seek an inquisitorial approach, which

was not intended by the Select Committee.
This is a new venture. If an obvious gap exists or becomes apparent, the House can easily remedy it with a degree of certainty which this amendment cannot provide. I should like to see more certainty. I think that the amendment is too uncertain and will lead to the difficulties I have foreseen. In those circumstances I hope that the hon. Member for Newham South (Mr. Spearing) will withdraw his amendment.

8.4 p.m.

Mr. G. R. Strauss: I congratulate my right hon. Friend the Member for Sunderland, North (Mr. Willey) and the Committee on their achievement. I know of the difficulties of the subject as I was Chairman of a similar Committee which worked for a very long time, since it was under no pressure, and which explored every avenue of the problem. We came to certain conclusions by which I stand. Those conclusions were right.
The Committee found that the one matter which was essential for Members of Parliament and for the protection of the public was the disclosure on all occasions by hon. Members of any interest they may have—not only when hon. Members are speaking in this House or in Committee but when they are talking to each other or meeting on unofficial occasions or when advocating a course or talking about any subject in which they have a financail interest. Under those circumstances they should be under an absolute obligation to declare an interest.
My Committee was set up because there had been instances where Members of Parliament had advocated or supported certain courses to other hon. Members without declaring that they were receiving financial benefit for doing so. We thought that it was essential that the practice of disclosure should be firmly maintained and extended and should become a rule instead of a convention, and that the penalties for disobedience should be severe. We considered that that was all that was necessary in the interests of the House and the public.
At the same time, we considered that while that rule was clear, simple and effective, the alternative, or the addition of, a register, had immense disadvantages,


greatly outweighing any advantages which could be gained. We set out our reasons at great length in our report. Those reasons were sound.
One aspect of this report which I favour is the removal of the worst blemishes of the proposals for a register which were, previously advocated and put before my Committee. At the time all those who wanted a register suggested that it was essential for there to be a comprehensive declaration of all hon. Members' interests—their financial interests, and those of their famiiles, their incomes, their capital, their possessions and a range of other matters. That would have resulted in a grave intrusion into the privacy of hon. Members.
That Select Committee said that neither Parliament nor the public was really concerned with any of those matters. On the other hand the principle of disclosure is simple and straightforward. No Member of Parliament can go wrong, as hon. Members can when they are asked to enter in the register all kinds of interests, which may or may not be necessary.
My Committee, with one exception, took the view that the establishment of any effective register would inevitably be inequitable, cumbrous, inquisitorial, and an unnecessary intrusion into the privacy of Members of Parliament. Moreover, the Committee felt that a register was pointless if there were a strict application of the code of disclosure and that code became a rule of the House.
The recommendation of the Committee which reported in 1969 was widely accepted as being reasonable and right. I know that a few people disagreed, some of whom had given evidence to the Committee about proposals for a register in which the private affairs of every Member of Parliament would be set down, including all income over £100. But, broadly speaking, I think that the decisions taken by the Committee in 1969 were accepted.
The right hon. Member for Down, South (Mr. Powell) said that there has been a change of opinion. True, there has developed a feeling in the country, largely as a result of the Poulson disclosures, that there should be a register kept for members of local authorities and possibly for Members of Parliament for

the protection of the public. There was a strong and natural feeling.
I think that there is a stronger case for a register of private interests for members of local authorities, as they can and often do have an influence on matters concerning contracts, purchases, land acquisition, town planning and so on. But we here do not have any influence whatsoever in any of those matters.
There is a case for disclosure in the United States Congress. Both Houses there have some disclosure practice because members of Congress have some influence in the making of Government contracts. That does not apply here. Therefore, such case as there is for the registering of Members' personal interests which may apply to local authorities or Congress does not apply here.
What are Members to be obliged to register? The registration advocated by Members at the time that my Committee sat, concerning shareholdings, and so on, has wisely been given up. The present proposal on registration is more acceptable than anything advocated a few years ago. If Members had to register all the matters then suggested, the register would have been a gold mine for all the gossip writers in the Press. They would have had enormous fun writing and scandalising Members' personal financial affairs particularly when they changed. That would bring not only Members but the House into contempt. That will not arise under the proposal we are considering today.
Members are being asked to fill up a register under certain headings. It looks simple, but what does it mean? No. 3 relates to "Remunerated trades, professions or vocations." Does that mean newspaper articles by journalists? That is a profession. The sources of the income are to be stated, but not the income. Must Members enter which newspapers they have been writing for during the past year? Must those who write books state which books they have written, and presumably the name of the publisher? Presumably they have to state not how much money they get from a business, but what business they get money from.
The hon. Member for Wokingham (Mr. van Straubenzee) told the House that he was geting remuneration from some business. My immediate reaction now, as at


the time we were making our report, is that it is of no interest to the House what remuneration he or any other Member of Parliament may get from some firm unless the question of that firm comes up in the House, or in Committee, or when he is talking to another hon. Member about the welfare of the firm or something of that kind. In such circumstances it is essential that he should say that he is being remunerated by the firm. Otherwise it does not matter to anybody what remuneration he is getting from this or that firm.
It is easy for any hon. Member to conceal the fact that he is getting support from any firm. This register will disclose nothing. An hon. Member may write down that he is getting some remuneration—he does not have to say how much—from firm XYZ, from International Traders, or from Smith, Jones and Robinson, without any indication of what those firms do and what the Member is being paid for. It is utterly useless information and discloses nothing either to the House or to the public.
Any scandals which have arisen in the past have been the result of Members trying to conceal these matters, and they may want to conceal them in future. Indeed, they will continue to be concealed, because people will not know what an hon. Member is being paid for. The Member will merely put down the name of some organisation or firm without any indication of what he is being paid for.
A number of other problems arise. I do not know what is intended. Suppose a Member, who is not remunerated on a regular basis, is asked to organise a trip for Members of Parliament to go to the Argentine to see something or other on one occasion only. Is that a remunerated job in the sense that is meant here? Surely that means he is getting a regular income, If a Member is given a bonus or a sum of money for doing one job of that kind, is that intended to be entered here?
There is the question of land and property. It is accepted that that is vague. It is suggested that Members must enter on the register any land or property of a substantial value or the income from it if it is substantial. What does "substantial" mean? A relative of mine bought a cottage in the country before the war for £3,000. Many people have done the

same. That property is now worth at least £30,000, which is a substantial sum of money. Would that have to be registered? I do not know. We are not told.
All these matters will arouse difficulties and controversy. What is substantial income from property? We do not know what "substantial" means in that respect. What about a Member's own house? That may be of substantial value. Has that to be put in the register?
All these queries remain unanswered. I suggest that the register will create more problems than it will solve. I assume that an overriding condition will be that stated in the letter which it is suggested should be sent by the Registrar of Members' Interests. This quotation from the Report has already been quoted, but I will read it again:
The purpose of this Register is to provide information of any pecuniary interest or other material benefit which a Member of Parliament may receive which might be thought to affect his conduct as a Member of Parliament".
By whom? By the Member himself? Members who receive some remuneration may say: "No one can possibly imagine that it would affect my actions in Parliament. Therefore, there is no need for me to put that down. It is ridiculous."
If that is to be the overriding consideration—I think it is—it would be a valid excuse for any Member of Parliament not to register any financial interest that he may have.
My view is that the case against a register of any kind is still strong. I do not believe that it will bring any benefit to the House or the public. It may raise difficulties rather than anything else.
I realise that the House has reached a decision on the principle of the matter. I did not vote, when the House did so on 22nd May, because I wanted to wait and see what happened. I was the Chairman of the Committee which said that no register was desirable. Now I take the view that if we are to have a register—the House has decided that it will have a register—this is as good as any. Almost any other would be more harmful. Therefore, I shall not oppose it. However, I still do not think that a register is desirable or necessary. I regret the decision that was taken in May, but now we have it. In the reality of our political situation I do not see how I could oppose it. Much


as I dislike the principle, this practical application of it is reasonable and I shall therefore reluctantly support it.

8.18 p.m.

Mr. George Reid: I find some difficulty in following those right hon. and hon. Members who have contributed so knowledgeably to the debate, for the reason that I and most of my hon. Friends in the Scottish National Party have minimal outside interests. That is not because we are angels but is largely a consequence of our being Scots resident in London. The Scots solicitor or advocate cannot practise in the English courts and the Scots graduate may have difficulty in adjusting to English practice.
The television presenter, like myself, has already given up the opportunity of appearing on the screen, out of fairness to future political rivals, by the fact of coming here. I am not suggesting thereby that we are whiter than white. I am simply recording a fact of life.
As hon. Members will be aware, the arrival of the Scottish Assembly may afford some of us, if we so choose, the opportunity of working simultaneously in politics and in our old careers at some point in the future. Therefore, my hon. Friends and I gladly accept the report. It seems to us to strike a fair balance between openness and unjustifiable intrusion on hon. Members' private lives. It affords individual Members the opportunity to protect themselves from the accusation that they have acted from concealed financial motivation, and it will provide a shield against malicious gossip. Of course, any hon. Member who was absolutely determined to avoid disclosure could still find ways and means of doing so.
In recent years the revelation of corrupt practices in local government has to some extent spilled over to this House. The compulsory registration of directorships, remunerative employment shareholdings, paid overseas visits and so on will do something to restore public confidence. I am only sorry that the report is not tighter in two respects. First, remuneration these days need not necessarily be in the form of cash benefit, payment of retainer or steady income. It can take different forms—the provision of a secre-

tary, the availability of offices, gifts in kind, the perpetual loan of equipment and so on.
Secondly, if there is to be a compulsory register, why should it not extend to the Lobby and Gallery? There is no reason at all why the Press, with whose members we deal on an intimate basis and who themselves should be eager to uphold the traditions of the Third Estate, should not reveal the various sources for which they work.
I have already indicated that I would view with something like horror the prospect of a House composed entirely of full-time politicians. I can think of nothing more incestuous. Cloistered together, hon. Members would be even more at the mercy of the Whips and the party caucus. I doubt, however, whether this House could function properly or whether its Committees could be adequately manned unless there were some 200 full-timers.
The pay which those hon. Members get and the sacrifices to which their families are often put leaves them susceptible to offers of external work which they do not necessarily want. The gossips will again insinuate that this in itself is a temptation to the very kind of corruption which the report is trying to eradicate. In future, for those hon. Members who do not want an external interest and who are prepared to sign a waiver to that effect, there may well be a case for differential rates of pay.
I promised to be brief, Mr. Deputy Speaker, and therefore I conclude by asking why so many hon. Members have made heavy weather of this matter. In the United Kingdom we seem to have an obsessive concern for privacy. In Sweden the entire public, not only Members of Parliament, have to make their tax returns openly available. Every Government document, with the exception of documents on defence and foreign affairs, can be examined by anyone who cares to walk in off the street.
Compared with that, the report is a very modest and very British document. It does not ask hon. Members to declare income, only interest. Some of its more cumbersome suggestions undoubtedly will be reviewed, in time and through practice, by the proposed Select Committee. I hope that it will form the basis of a code


of practice for all parties putting forward candidates for election, for local government and for the forthcoming Scottish Assembly. Adopted by this House, it will go a long way towards achieving a climate of openness which is itself a precondition of open and effective parliamentary democracy.

8.25 p.m.

Mr. John Golding: The hon. Member for Wokingham (Mr. van Straubenzee), who seems by his absence to be putting his principles into practice, spoiled an otherwise excellent speech by connecting it with an attack on the Whips. As one who has spent many years in the Whips Office, may I say that their problem generally is of Members showing too little interest rather than the non-disclosure of a financial interest.
As regards the motion before the House, the resolution of 22nd May 1974 declared
That in any debate or proceeding of the House or its Committees or in transactions or communications which a Member may have with other Members or with Ministers or servants of the Crown, he shall declare any relevant pecuniary interest or benefit of whatever nature, whether direct or indirect, that he may have had, may have or may be expecting to have".
I support that very strongly, and shall not debate the merits of the particular principle.

Mr. Angus Maude: On a point of order, Mr. Deputy Speaker. So that we may be guided, may I ask whether we are in order in discussing the amendment to the second motion? As I understand it, the second motion has not been moved.

Mr. Deputy Speaker: (Sir Myer Galpern): As I understood it, Mr. Speaker indicated that we could discuss both motions and both amendments together. We shall vote before 10 o'clock on the No. 1 motion and amendment, and after 10 o'clock, by virtue of the business motion which was passed by the House, the second motion will be moved formally, together with the amendment to it, so that the hon. Member for Newcastle-under-Lyme (Mr. Golding) will not have an opportunity after 10 o'clock to speak to his amendment.

Mr. Golding: I should like to put on record, Mr. Deputy Speaker, that that

is the first time you have ruled me in order. I do not want to debate the principle of that motion. I want to draw to the attention of the House the fact that the motion moved tonight by the Lord President has so defined proceedings as to reduce the efficacy of the motion, because the motion tells us that the "proceeding"
Shall be deemed not to include the giving of any written notice or the asking of a supplementary question".
The Committee, having before the Resolution of 22nd May 1974, decided that if it were to be implemented in full Parliamentary Questions and the giving of notice or tabling of an amendment would have to be included. It discussed the circumstances whereby on an order paper the letters "IR" where there was recorded interest, or the letters "ID" where there was an indirect interest, could be shown against a signature or a Parliamentary Question or an amendment to signify that the Member had either a recorded interest or an indirect interest. But the Committee added that it would be "a cumbersome procedure".
The lukewarm attitude of the Committee towards the declaration of interest in connection with motions, amendments and Questions was echoed by the Lord President tonight. I accept that it would be very difficult to apply the principle of declaration of interest to the asking of a supplementary question, and my amendment does not cover that. Likewise, it would be very difficult to apply the test of indirect interest to a motion or Parliamentary Question, so my amendment does not cover the declaration of indirect interest.
Likewise, outside the Chamber I have been persuaded that there are inherent difficulties in covering motions and amendments, so my amendment does not cover these. I have been persuaded, however, and this has certainly been accepted by the Lord President in his opening contribution tonight, that it would be practicable to have a declaration of interest indicated against a Parliamentary Question where that interest was sufficiently strong for the Member to have recorded it in the register.
I strongly recommend to the House that we should adopt the motion and also the amendments, so that in future the Order Paper, upon which arc stated


the notices of Parliamentary Questions, will have against each Parliamentary Question, where relevant, a declaration of interest.
My right hon. Friend the Lord President, in recognising that it was practical to do this, suggested that it was illogical. I accept that there is a degree of illogicality, but, as the right hon. Member for Down, South (Mr. Powell) illustrated in his speech, our approach has to some extent to be illogical. There has to be a blurring, but even so I think it is worth making the attempt. I accept that it is slightly illogical, but a case can be made for saying that a Parliamentary Question, rather than an amendment or a motion, should have indicated against it an interest.
Parliamentary Questions are one of the simplest ways of focusing attention upon a particular subject. A Question is noticed most easily and readily by one's parliamentary colleagues. If I wished to draw the attention of the House to a subject in which I had a financial interest, I would think first of tabling a Question. I would know that hon. Members would not necessarily read the Order Paper to see each of the Early-Day Motions that were tabled. They certainly would not be aware of each amendment put down to each Bill in Committee. Many hon. Members read the list of Questions very carefully. It is easy to draw hon. Members' attention by way of a Question. What is more important is that it is a good way of focusing the attention of Departments on a particular subject. We know the expense incurred and the effort involved in the Civil Service in connection with the answering of Parliamentary Questions.
What is most important is that we know that the media pay great attention to Question Time. We know that when they are looking for new stories for the following week they will read the White Book and the Blue Book to see what Questions they consider to be newsworthy. They do not adopt that practice with amendments and they certainly do not pay the same attention to motions. Therefore, a case can be made for singling out the Parliamentary Question, because it is practical.
I recommend that, to the extent I have indicated. Questions should have

against them an indication of interest, which would be simply the writing of the letters "IR" against them.
I should not like to see this system extended. If a Question is planted, I am not advocating that the letter "P" should be printed against it. If a Question has been asked to give television and radio coverage, I am not advocating that the letters "R" and "TV" should be placed against it. However, there is a substantial case for placing the letters "IR" against a Question when the hon. Member who has tabled the Question has a substantial interest which has been registered.

8.34 p.m.

Mr. A. G. F. Hall-Davis: I start by declaring an interest, as I did to the Select Committee on which I served, in as much as I was a director of the company for which I worked full time when I entered the House—and I am still a director. I have always declared my interest. I know that it is much to the knowledge of the hon. Member for Fife, Central (Mr. Hamilton), if of no other hon. Member.
I welcome the fact that within the terms of the resolution passed by the House the Select Committee has been able to present a unanimous report. I wish to touch on one aspect of the recommendations.
I particularly welcome the emphasis placed on the right to privacy of hon. Members and their families. I have always believed that the freedom of hon. Members to undertake remunerated work outside the House should be regarded as desirable, although I know that some hon. Members strongly disagree. It should be regarded as desirable because only on that basis will membership of the House reflect the composition of the wider community outside.

Mr. George Rodgers: Does the hon. Gentleman claim that a bricklayer or plumber could work part-time in the House and part-time outside, or does that facility have only restricted scope?

Mr. Hall-Davis: I would not seek to place limitations on anyone. I do not believe that in this modern age it would be by any means impossible or even unlikely that such part-time work could be done.
I particularly welcome the maintenance of a degree of privacy, because I believe that the work of the House and the discharge of constituency duties combined make exceptional demands on the time of hon. Members compared with those in other occupations, and particularly on the forbearance and understanding of the Member's wife and children. I know that Scottish Members are very aware of the problem at this time of year. I was going to refer to the husbands and children of hon. Ladies, but hon. Ladies do not seem to be represented here at present.
Whatever level of remuneration for Members of Parliament is fixed, which in itself is a controversial subject, many people in all parties—some of them perhaps in the occupations to which the hon. Member for Chorley (Mr. Rodgers) has just referred—who wish to enter the House will be receiving higher remuneration, in some cases substantially higher, than would be generally acceptable as remuneration for Members of Parliament. To add to the domestic sacrifices, that the family of a Member has to make, the destruction of privacy that would result if the quantum of remuneration had to be disclosed would lead to some people deciding that they would not enter the House—people who had a potentially valuable contribution to make to it.
That is my first reason for welcoming the regard for privacy in the report. The second is in direct contradiction, I believe, to the view expressed by the hon. Member for Newham, South (Mr. Spearing). I have heard him express it before, and I listened to it today with interest, as one does to views that are to some degree opposed to one's own. I believe that contributions to the debates and work of the House based on direct personal involvement and experience of a job or industry are more valuable than contributions based on hearsay or the views or reporting of others. I recognise that there may be people of an intellectual capacity and cast of mind who can by observation draw complete and correct conclusions, but certainly I cannot. Where I have had a close and continuing association with a problem I have always felt most confident to express an opinion on it.

Mr. Spearing: The point is that that experience often comes before one enters the House.

Mr. Hall-Davis: I am delighted by that intervention, because I like to respond to the debating atmosphere in the House, and it brings me to another point.
While I always listen with particular respect, interest and attention to a man talking about the job or industry with which he has been associated, whether mining, banking, teaching or farming, I would listen with more attention, and would be much more confident in the value I attached to his opinions, if I felt that he was up to date in his association in this rapidly changing world.
My association with industry was interrupted when I was for a time in that junior capacity of Whip which has been referred to tonight. When I went back, after certain changes which were outside my control, to the membership of the board of that company, my very genuine words, as I met my former colleagues for the first time for 18 months, were that it was nice to be back in "the real world". There is no doubt that this building is a very intense, inward-looking place, and when we go to our constituencies we tend to talk to our supporters who share, dare I say it, our prejudices or perhaps our preconceptions.
Again, had it been recommended that the quantum of remuneration should be disclosed, we would have not only excluded people from coming into this House whose services would be valuable, but also we would have inevitably led to those who are already here being obliged, for one reason or another, to separate themselves from the associations to which I at least give value.
In view of the remarks of the right hon. Member for Down, South (Mr. Powell), I will make one further comment. I do not share his analytical and judicial capacity. Nevertheless, when I listen to an hon. Member talking, I feel that I am better able to assess the value of his contribution if he says that he has a particular interest or association with the subject. I do not believe that we lose anything by declaring that interest, nor do I believe that we lose anything by registering it. What I hope is that the register, in the form in which the Committee have recommended it, will lead to a greater freedom of hon. Members to speak on subjects with which they have had a direct involvement.
I have always been very careful—for this reason I have escaped the attention of the hon. Member for Fife, Central—not to intervene on subjects related to an industry with which I had a close connection unless I felt it was in a general field where I could draw on experience gained from that industry, rather than the merits of the argument applied to that industry itself.
I hope that the existence of a register will enable Members to contribute more fully to the debates, and that is one reason why I welcome it. The other is that it will enable hon. Members to assess not that a Member is speaking venally on the subject with which he is associated but because they will wish to take into account that inevitably, after a long association with some sphere of activity, one's views are coloured, and perhaps one sees the good points without seeing some of the weaknesses and disadvantages.

Mr. Deputy Speaker (Sir Myer Galpern): There are approximately 10 hon. Members still anxious to take part in the debate. I reinforce Mr. Speaker's plea for brevity. If we could have six-minute speeches—a great deal can be said in six minutes—it would be possible to hear them all.

8.44 p.m.

Mr. Joseph Ashton: I welcome the report because it is the end of three years of campaigning which began with the first Poulson allegations in the newspapers—a matter which has concerned many of us ever since. It concerns us because there is a great desire to maintain public confidence in the work of the House, and that confidence is breached when month after month newspaper headlines speak of things such as the Poulson funds. Even now, with the constant references and innuendoes concerning the hon. Member for Walsall, North (Mr. Stonehouse), can anybody say that those innuendoes would not affect any potential by-election? Of course they would. That is why this House must be seen, like Caesar's wife, to be above suspicion. It is very well for us to know that it is an honest, sincere place.
It is difficult for an hon. Member to make any sort of allegation if he thinks something is going wrong. I fell into

this trap, as hon. Members know, in writing an article in a responsible journal, Labour Weekly, and had to suffer for it by going before the Committee of Privileges. I am not trying to bring that report up now. I accept it entirely. It is difficult to stand up in the House and name names because of the great publicity which ensues in the media. Not to name names means having to face up to innuendoes which affect all of us.
Perhaps we are accused of being informers or letting the side down because we dare to speak up when something like the Poulson case arises or some other highly-charged event which has political significance, even if it is only temporary.
I welcome this report. I am relieved to see it. It gets the emphasis right. The emphasis ought to be on the source from which funds come for activities in this House rather than the amount. I have an interest to declare in that I am a sponsored trade union Member. I always put this in my election address at a General Election and in "Who's Who", as does every other sponsored trade union Member. What concerns us, the newcomers who have not been here for so long—and this is missing from the report—is the growth in public relations activities. It is this which has led many of us to think that the time has come to start a campaign. Here I pay my respects to my hon. Friend the Member for Newham, South (Mr. Spearing) who, with me, was determined that the campaign to set up some sort of register should be started. We had in mind articles such as that which appeared in The Observer of 9th July 1972 which said:
PR men say 20 to 30 MPs are ' bendable'".
The article said:
A bought MP can put down questions in the House.…Some are paid to book House of Commons reception rooms and give parties for pressure groups ranging from animal lovers to visiting Commonwealth dignitaries. Part of their job is to round up MPs for free drinks…the pharmaceutical, chemical, gaming and bookmaking, and commercial radio interests, are especially assiduous in lobbying MPs. Some of them are known in the public relations business to have paid sums of money to individual MPs for 'advice' at a time when votes on committees could affect the shape of new legislation.
Articles such as this tend to damage all of us, not just those who might be


indulging in public relations activities. This leads our constituents to think that all of us have a finger in some outside pie. This will happen until there is a register.

Mr. Tim Rathbone: May I add to the list the hon. Member has read out the category of trade union-sponsored Members?

Mr. Ashton: I said that we declared our interests in "Who's Who". It is in the Library. We mention it in our election addresses. I agree that it should be on the register. But trade union Members tend to be proud of the fact and to advertise it rather than conceal it. I am not certain that Members with other interests have that sort of pride. That kind of article at the time of the Poulson affair does great damage to individual Members.
The public relations activities in this House are growing. I have a dossier three inches thick which I have collected over six years. I will not bore the House by reading it. I refused to divulge it to the Select Committee because it is water under the bridge. I will give one instance from this dossier, one I have not given before. On 9th February 1972 a demonstration film was held in this House by Golden Chemical Products. It was advertised in the Whip. Pyramid selling ran into great difficulties thereafter. That sort of activity tends to denigrate this House if we do not know who is paying for such a reception and who is holding it.
If those promotional activities are taking place and if Members are receiving fees we ought to know. We ought to know the source of the fees. We who are full-time Members of the House are not against any hon. Member doing anything in this place provided his constituents know about it. That is the key question, not whether Members have outside interests or whether they are involved in various activities which bring in extra cash. It is whether their constituents know about it. That is why some of us welcome the Committee's decision.
There is still one loophole at which the Leader of the House should look. When I was involved with the Select Committee I wanted to obtain information on the booking of catering facilities and banqueting rooms in the House to prove

the concrete facts that I had obtained. I was refused that permission. The Catering Sub-Committee refused to allow me to enter its office and turn up the dates on which I was certain that promotional activities had taken place and that certain people had received fees for them. I could not obtain that evidence.
I could have pursued the matter and insisted that it be dealt with on the Floor of the House, but I did not. This is a loophole which is not brought to light in the report and about which hon. Members should be made aware. Any hon. Member should be able to check the facilities of the Catering Sub-Committee to see who booked rooms for what functions and on what dates, and whether they were paid for it from the register.
At present an active campaign is being fought by Bristol Channel Ship Repairers. That company has invited hon. Members to lunches and asked them to make approaches to the former Secretary of State for Industry with a view to his meeting it and putting the case against the nationalisation of the firm. I am not foolish enough to think that any hon. Member will be persuaded by a lunch. However, this form of persuasion is insidious. Hon. Members are entitled to know, when they receive such an approach, whether the man is being paid for it. If they want to refuse the invitation to that lunch, they should be able to go downstairs and check whether a lunch is being held and who has paid for it.

Mr. John Nott: Would the hon. Gentleman be a little more specific? I have had five meetings today with various interests who want the Opposition to make points for them on the Finance Bill. Is the hon. Gentleman saying that he is concerned with this only if hon. Members receive remuneration or a lunch for it? In our everyday lives all of us accept hospitality of one sort or another.

Mr. Ashton: I have nothing against any hon. Member having lunch downstairs. Trade unions organise lunches downstairs when they want to talk to hon. Members. I am not saying that that is wrong. However, it is wrong that an hon. Member is not allowed to look at the book to see who has booked the room on a particular day and to check.
in the register whether the invitation comes from an hon. Member who has an interest.

Mr. Nott: A financial interest?

Mr. Ashton: Yes. None of us knows whether the invitations we receive are issued by someone who has a genuine political interest in the cause or by someone who has a financial interest in it. This is a loophole that needs to be examined. The activity being carried out by Bristol Channel Ship Repairers is a form of PR activity that is becoming more insidious.
I have a letter from this firm written, in ballpoint pen, from an address at 24 Royal Crescent, Bath. We receive dozens of letters like this every day. This letter is signed by R. C. Jones-Bateman. When I checked around I found that everyone had received letters like this. [Interruption.] I am trying to be brief. This is the sort of pressure which—

Mr. Deputy Speaker (Sir Myer Galpern): Order. I am afraid that the hon. Member for Bassetlaw (Mr. Ashton) is not speaking fast enough.

Mr. Ashton: This has been a long campaign. I have not spoken on it before and as I was personally reprimanded by the Select Committee, I think I am entitled to more than six minutes.

Mr. Deputy Speaker: The hon. Gentleman has been speaking for more than six minutes.

Mr. Ashton: The Select Committee refused permission for me to obtain the evidence I sought in order to defend myself. I am not making any complaint. I have never appeared before the Committee, although I could have insisted upon it and gone there and put on record much that would have done the House a lot of damage. I did not. I did not press for information, because I had no wish to do so.
There is a loophole that catering facilities of the House are being abused. An instance of this is shown in an article published in The Guardian on 19th December 1974. It says:
Yesterday, at the House of Commons, he"—

that is, Jack Solomons—
picked up the soggy British and Commonwealth heavyweight championship fight between Danny McAlinden…and launched it with a loud fanfare…
Only a man with friends and influence could contrive the situation in which the two fighters signed their contracts…using the shoulders of…Lord"—
I shall call him "Lord X"—
and with the Speaker of the House of Commons, Mr. Selwyn Lloyd, the deputy Speaker of the Lords, Lord Maybray-King"—
and so on, with a Mr. X, a trade union leader, and another Lord at the luncheon.
Even boxing's hard men blinked at the line-up, but after the Chablis Premier Cru and the Mercury Maurice Protheau"—
I do not know whether they are foods or wines. However, this "ill-fated championship" took off.
That publicity in a national newspaper is worth hundred of pounds It is an abuse of the House of Commons. It trivialises the House. It trivialises the House when the potential Miss Worlds are paraded around the place. If one unfortunate Member says "They are all too thin", he is plastered across the Sun or the Daily Mirror. It is publicity for Mecca.
We are all asked to take part in this sort of charade. Some of us who have not been Members for long enough fall for it. I do not like it if someone says to me "May I take a film of the man who winds up Big Ben wearing a Brand X wristwatch?" Perhaps that happened because I was a member of the All-Party Film Committee.
This sort of thing is going on more and more—the gimmicks, trivialities and pressures used by cheap salesmen and public relations activists trying to use the House for purposes for which it was never intended. Those of us who feel strongly about such matters ought to have access to the catering records.
I welcome the report. It is absolutely necessary. I am glad that after three years it has finally come to fruition—and I am sorry to have spoken for 11 minutes instead of six.

8.57 p.m.

Mr. Tim Rathbone: I must immediately declare an interest as a director of a large group of advertising and public relations companies—and I


am proud of the fact. Although I am not personally involved in the public relations function of those companies, I have often been at the receiving end of brickbats, such as those flung across the Chamber by the hon. Member for Bassetlaw (Mr. Ashton), on the question of the interlocking of influences and interests. Therefore, it is perhaps because of this that I join the hon. Gentleman—possibly to his surprise—in welcoming the register of interests.
It is a sad fact of the matter that too often too many people think that there is too little trustworthiness among the Members of this House and the doings in it. I do not believe that that is the truth of the matter. It is insufficient nowadays, however, to be honest and to be incorruptible. We must be seen to be so. A register of interests, as recommended by the Select Committee, is an important step in this communication. That is why I intend to support the motion.
Furthermore, I support a compulsory register. If, indeed, a law is needed rather than a regulation, so be it. I leave it to right hon. and learned Members to advise me on that matter. I believe that a compulsory register is essential, first because it will make matters more convenient for those referring to it; secondly because such a register, for most if not all of us, is in no way different from a voluntary register; and thirdly because only a compulsory register can have attached to it the trust which is so crucial to the operation of an instrument such as this.
Furthermore, I support a public register such as the Select Committee recommends because only through such a register can the world outside this House see what we are doing, what influences may bear upon it and whether no influence bears upon it. This last point is most important.
I have three queries. The first concerns the definition of what is a benefit and what is value. The words "material" and "substantial" are both used. Though "material" and "substantial" may mean something to one Member, they may mean something quite different to another. I should have preferred to

see a more specific indication, even though such a specific indication was inevitably arbitrary and even though it would need to be revised from time to time. That would, I think, meet at least some of the points of criticism which hon. Members have made in the debate this evening.
Secondly, I question whether interests should be confined only to hon. Members. Should they not include wives or husbands and children? The Committee must have sought guidelines in its discussions on this point. I believe that it has drawn the line too close. I would have preferred to see the same guideline established as is used by the Inland Revenue of the close family as the line of demarcation, as the line most likely to invest the register with the trust that we desire for it. I hope that the Select Committee will investigate this as it looks at the future.
My third area of question is whether the registration of the interests of the Lobby and Gallery correspondents should be included. I hope that the Select Committee will reconsider this. I hope that the question of the registration of the interests of candidates, the aspiring national figures of the future, will be referred to the next Speaker's Conference, and I hope that it will be done quickly because I hope for a General Election quickly.
The fourth area is that of local authorities and others in public life. I hope that the Royal Commission will be turning its mind to this and that it will be reflected in legislation before too long.
The House gave much thought to this matter in 1959, before I was a Member, and more recently last year. It will have to give it much more thought as time goes by. The atmosphere has changed and will continue to change. But whatever the logic of the situation regarding the behaviour of this House, we are now discussing what people believe about the House, think about it and feel about it, and it is the feelings and the beliefs of the people outside this House, those who elect us to be here, that we have to consider. I believe that the register will enable people to place more trust in this House and in the people in it than is at present the case. It is for that reason that I support the proposal this evening.

9.3 p.m.

Mr. William Hamilton: I think it important to recall that this is in the nature of the culmination of a campaign waged by back-bench Members of this side of the House, and I like to think that I played some little part in initiating this exercise. As the right hon. Member for Down, South (Mr. Powell) reminded us, it was initiated in a period, if not of hysteria, of considerably greater interest in this problem than there is now. The fact that the alleged hysteria has dampened down somewhat, however, is no reason why we should now retreat from the problem, because it is none the less urgent for that.
The case was argued predominantly by those who are full-time Members of the House, of which I am one. I do not believe that this House could work unless there were a considerable nucleus of full-time Members, but I am not one of those to take the view that every hon. Member should be a full-time Member. I have made the point which the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) made, that there might be reexamination of the salary structure in this House, because if we get 200 Members who sign on as full-time Members they ought to be recompensed to enable them to do that job.
There are undoubtedly people here who have part-time jobs outside, such as barristers and journalists, who contribute quite a lot to this House. Indeed, some of them are better Members than are some of the full-time Members. Nevertheless, generally speaking they do not man Committees in the morning and they are certainly very reluctant to serve on investigatory Select Committees, where extremely hard work is done which goes largely unpublicised. I believe that this problem might be worth examination by a suitable Committee of the House.
The hon. Member for Wokingham (Mr. van Straubenzee) referred to the full-time Member and said that where he was dependent on his salary, which is in the nature of things a low salary, he was a party hack and, therefore, frightened of the Whips. I fall into all those categories except the last. I am a full-timer and I have a relatively low salary, but I do not give a damn about the Whips, and they know that. The days of hard discipline

as a consequence of dependence on a relatively low parliamentary salary have gone. That applies to both sides of the House, I am glad to say.
I listened carefully to the right hon. Member for Down, South and I was disturbingly in agreement with a large part of what he said. At the outset I was very much in favour of the full-blooded compulsory register right down to detail. I gave evidence to the Select Committee spelling out the figures I had in mind as to shareholdings and so on. A register will convey nothing unless it gives specific figures of what a job is worth to a Member. To that extent the Select Committee's report is a diluted version of what some of us wanted.
I agree that when one gets down to working out the details, the very people one wants to catch will escape. When I was confronted with this argument before the Select Committee, I said that it was an argument against income tax. The very people one wants to catch are, generally speaking, the ones who escape. A continual battle goes on between the Inland Revenue and the sharp-eyed accountants, but that is no reason why income tax should be abolished. One keeps on closing loopholes. The register will not be perfect—far from it—but as loopholes are exposed so they can be closed, and that is the system I prefer.
I have the highest regard for the House. It is like being hooked on a drug. The longer one stays in the House, the more attached one gets to it. In the nature of this job some of us have travelled around the world, and I have not seen any less corrupt national legislature than this one anywhere in the world. I hope that that does not sound too complacent or smug.
We tend to be led by the nose by the Lobby correspondents who sit there on expense accounts and try to expose what little corruption there is on the Floor of the House. We could all name names among the Press Lobby correspondents, and hon. Members who have referred to the Lobby have a point. If we are to make declarations of interests, so should everyone who is associated with this House and the House of Lords, which has not been mentioned. Great pressures can be exerted there. My hon. Friend the Member for Bassetlaw (Mr. Ashton) referred to luncheons downstairs paid for


by outside squandering bodies. If such a body can get the name of a Lord on its notepaper, it is worth a lot. It is also worth a lot to the Lord. It is important to have a much more comprehensive register than that which has been suggested.
As I listened to the right hon. Member for Down, South, I was inclined to favour a return to the status quo. I did not agree with the report made by my right hon. Friend the Member for Vauxhall (Mr. Strauss), and I am not too enthusiastic about the report now before us. I was inclined to come down on the side of the right hon. Member for Down, South until he said that he would defy whatever the House decided. I think that is the wrong approach, and especially so coming from one who has declared that he has respect for such matters as the rule of law. If the House makes rules for itself, or for anyone who wishes to come here, I think that everyone should be expected to obey them. If we pass legislation on these matters, everyone should be expected to obey it.

Mr. Powell: If legislation is passed which alters the law of the land so as to make this a condition upon being a Member of Parliament, like everyone else I would obey it.

Mr. Hamilton: I am glad that the right hon. Gentleman has clarified the point. If the House decides that this matter must be dealt with legislatively, so be it. I hope that the right hon. Gentleman would agree to accept such legislation if it ever came about. I am glad that he has clarified his position.
I welcome this step as it is a step in the direction in which I want to go. This is very much a diluted version of what the majority of my hon. Friends wanted in the first place, but I understand that for practical reasons it has not been possible to go the whole way. However, I welcome this first step.

9.12 p.m.

Mr. John Stokes: I remain opposed to the register of Members' interests for reasons which I outlined in May of last year. Nothing I have heard today has made me wish to change my mind. I agree with the right hon. Member for Down, South (Mr. Powell) that this proposal will be ineffective and is basically unlawful and a

violation of our constitution. I also agree with the detailed criticisms of the right hon. Member for Vauxhall (Mr. Strauss) as regards the actual register.
Today, as a society, we have become obsessed with the desire to classify and codify everything. It may be paradise for the social scientist but we should resist the trend. Nothing should be done here to weaken the independence of Members of Parliament. I repeat that there is no public demand for this measure. Members of Parliament should be trusted to make a proper disclosure of their private interests where appropriate. That is the nub of the whole matter, and not the register.
I believe that the register is not only unnecessary but will never catch the real scoundrels. The effect of lobbying has been greatly exaggerated. Nor do I believe that public relations men are sinister.

Mr. Leslie Spriggs (St. Helens): The hon. Gentleman has mentioned the violation of our constitution. Will he explain what constitution we are violating?

Mr. Clement Freud: The Common Market.

Mr. Stokes: In this House we cannot make a resolution which has the force of law outside. That point was made at length by the right hon. Member for Down, South before, I think, the hon. Member for St. Helens (Mr. Spriggs) came into the Chamber.
I declare an interest in that I am a director of a firm of personnel selection consultants.

Mr. William Hamilton: What do you get?

Mr. Stokes: That fact is mentioned in "Who's Who" and my constituents know about it. I never come into conflict with my professional work or my work here. In fact, my interest has been a great advantage in that it has enabled me to see more people in the world than there are on the Labour benches.
There is no abuse that I know of in the House at the moment. The opportunities for corruption are few, and certainly fewer than in local government. In my five years here I have never even


been offered a box of chocolates for any favours I might be prepared to give.
I believe that the clamouring for disclosure is due to the passion that is felt today to pry into the individual's private affairs. That is a curse of our society. I also regret that the reason is partly due to envy and the desire to pinpoint and magnify those who have more possessions than some others.
It is felt by some that Members should have no outside interests and that they should be full-time politicians. In fact, Members' outside interests greatly enrich the House. There would be a great change in its character if the present system were to be abandoned.
This House is the best judge of the conduct of its Members. We all know each other and in time we get to know each other very well. That is one of the joys of being in this place and it makes one proud to be here. I think that we are quick to perceive if anything is wrong. We all know that the largest single group of Members is that sponsored by the trade unions. We know, too, that those Members are a valuable element. I suggest that they are neither corrupt nor corruptible.
There is no case for the new proposals, and here as a Tory I disagree with the Whiggery of my hon. Friend the Member for Wokingham (Mr. van Straubenzee). I believe that this House must on occasion have the moral courage to resist change when it is change for its own sake. Sometimes to preserve what is best it is necessary not to make a change. This is one of those occasions.
I have one or two comments to make on some of the items in the register. The first concerns directorships. What on earth do these have to do with Parliament? Does it matter whether I am a director of ICI or of a fish shop? Then there is the question of one's job. If I am a sanitation inspector or a hairdresser, what is that supposed to signify? The third category concerns trade, profession or vocation. Does that mean a priest or a doctor? What is wrong with that?
This is trivial. Perhaps the most absurd of all for this great and ancient House is No. (8):
land and property of substantial value or from which a substantial income is derived".

Surely any hon. Members with any knowledge of history know that those who first came to this place held land or property and it was admirable that they should have done so—[Interruption.] The fact that Labour Members laugh demonstrates that they have no knowledge of English history.
There is then the question of a beneficial interest for our grandmothers, cousins, sisters or aunts. What absolute rubbish that is. The more one looks at the details of this register the more one sees its absurdity. I hope that the House will have the good sense to reject it.

9.18 p.m.

Mr. John Prescott: I do not wish to take up the points of so-called logic which were put forward by the hon. Member for Halesowen and Stourbridge (Mr. Stokes). Instead I give a limited welcome to the report. It goes considerably further than previous reports, particularly that produced by the Committee chaired by my right hon. Friend the Member for Vauxhall (Mr. Strauss). This report grasps the nettle, and the motion, if accepted, will enable the House at last to do something about the establishment of a register of interests.
As my hon. Friend the Member for Fife, Central (Mr. Hamilton) has said, Parliament will demand more and more in the future that we should be full-time Members of Parliament. The fact that a Member is a full-time Member does not mean that he lacks experience. I express a vested interest as a sponsored member of the National Union of Seamen. But I do not believe that I have to be paid to go to sea in order to be able to communicate my experience in that activity to the House. A similar situation applies to all Members with specialised knowledge.
The report goes part of the way towards dealing with the problem but it does not go far enough. Our debate has echoed the serious public concern which exists and which existed at the time of the previous vote on this matter. The public now feel that Parliament is attempting to do something about this matter. The Select Committee is recommending a system under which we can attempt the first few faltering steps towards bringing in some form of control


by which we can record our interests and so allay public concern about any conflict of interests.
I listened with interest to the speech of the right hon. Member for Down, South (Mr. Powell), who said that the House already had sufficient checks. But we know what happens in these cases and we all know of incidents which have caused concern. Therefore, why has nothing been done earlier about this matter? Surely there should be some means of bringing to the attention of the House matters which cause concern.
The Select Committee has presented us with an administrative piece of machinery embracing areas of disclosure, but I regard the steps as the minimum steps to adopt. I see certain major weaknesses in the recommendations and I should like briefly to deal with them.
A fundamental concept behind the report is that it still upholds the view that Members of Parliament can maintain two types of occupation. They can be employed as a Member of Parliament and conduct their parliamentary duties, but at the same time they can pursue other paid, remunerative occupations outside the House. I believe that the nature of those outside occupations brings with it a conflict of interest—not just in a pecuniary sense but as affecting the rôle of the Member, confidence in him and his image to his constituents.
It was said earlier that there was concern whether enough sanctions would be involved if we were to pass the motion. If Members do not record interests, it will be regarded as a contempt of the House. This goes further than the previous practice. Previously it might have been regarded as at variance with an unwritten code, but it will now be a much more serious matter involving contempt of the House.
I am concerned with those matters which cause concern and affect the confidence of the public in Members of Parliament and which touch the issue of credibility. Let me give one or two examples. I know of hon. Members who are solicitors. One of them told me of an occasion when he could not give advice to a constituent on a matter concerning the landlord and tenant provisions because the Member concerned was acting for the landlord. The Member in

question had to refer the matter to another hon. Member. That is a conflict of interest, although it may not be a pecuniary one. An hon. Member should not be put in a position in which he has to say "I cannot deal with your problem because I am in a commercial relationship with the person against whom you are complaining" even though the person concerned might be breaking the law.
We could all give examples of such conflicts of interests. We hear a great deal of talk in this House about the working people having to tighten their belts and make sacrifices. At the same time there are Members of Parliament who enter into engagements and obtain remuneration through countries where our taxation rules do not apply. Many of us know a number of instances of this kind. It is hypocritical to say that people should carry burdens and make sacrifices when Members of Parliament are involved in other occupations which bring them substantial remuneration outside the House.
There are many more examples which I could give to the House. One of my colleagues—I shall not give his name, although I can do so if necessary—appeared in my constituency to speak on behalf of the Economic League. When I complained to him as a member of my party, he said "You should not make the mistake of confusing my job as a lecturer with my being a Member of Parliament". That is a conflict of interest which does politicians no good at all. Another case involved an Opposition Member of Parliament who was acting for a public relations company one of whose clients bitterly opposed the nationalised industries. The public relations company was acting for the National Freight Corporation and was arranging lunches and contacts. Again, that does no good to Parliament or to the rôle of Members.
I believe that there is a considerable move towards the concept of one man, one job. This proposal is a limited step towards that. Lord Boyle made it clear that the full-time Member of Parliament was here to stay.
I have one major criticism of the report, which makes it clear that Members of Parliament must judge whether they


inform the House of certain overseas visits and whether a material benefit or payment received should be declared. The judgment of the House might be that certain benefits may not be considered as material for declaration. The coffee pot incident was very limited in value. However, people outside the House had different views as to whether a Member of Parliament should have been involved in that, although I cast no reflection on the right hon. Member concerned. There are many other examples of cases of that kind.
The registration form refers to land and property of a substantial value or from which a substantial income is derived. A Member has to make his own judgment of what is "substantial". I note that for sponsored Members of Parliament 25 per cent. of election expenses—£400—is defined. Is that considered a substantial amount, as in the case of land? In one sense we have a definition. In other respects—for example, land, property and income from land or property—there is no definition.
I welcome the report, although some loopholes are involved. The report is limited, but clearly it is a step towards establishing full-time membership of the House of Commons.

9.26 p.m.

Mr. Geoffrey Johnson Smith: For a short time I was a member of the Select Committee. Therefore I hope that I shall be acquitted of being self-congratulatory when I add my congratulations to those of other hon. Members on the work of those hon. Members who served for many months on that Committee, and more especially the Chairman, the right hon. Member for Sunderland, North (Mr. Willey).
I appreciate the force of the arguments put forward by the right hon. Member for Down, South (Mr. Powell), which I think are very strong. I was persuaded that the time had come for us to have a compulsory register. Some hon. Members believe that by voting for this procedure they will be hastening the end of the political life of those Members of Parliament who think that it is right to take on additional outside employment. They hold that a register is unnecessary because all hon. Members should be full-

time Members of Parliament. I disagree. My judgment has not been affected by my view that hon. Members should be allowed to undertake paid work outside the House. I have always done so. I declare that interest. When I lived in Putney it seemed to me that the then hon. Member for Putney, Sir Hugh Linstead, added not only to his authority by being secretary of the Pharmaceutical Society but to the wisdom of the House. I hold the view that up-to-date experience gained outside can be useful to the House.
I believe that the salaries paid to Members of Parliament, even including allowances, make it very difficult for some hon. Members to meet their commitments. They must be the judge of that. They must be allowed the freedom to decide to what extent they should take outside employment to meet those commitments.
I would have thought that a career in the House of Commons could be seriously interrupted for a period of years or abrupty terminated at a time which could be financially disastrous to the Member of Parliament or his family through events beyond his control. I believe that he should be allowed to take prudent precautions like any other citizen. It makes no sense to disbar an hon. Member from taking on other employment. I regret that the step recommended by the Select Committee should be regarded as preventing persons from becoming full-time members. It makes even less sense, bearing in mind the heavier work load of the modern Parliamentarian, to pay him inadequately so that he lacks the resources to do his job properly. That is the way to encourage hon. Members to seek dubious and excessive financial rewards from outside bodies.
I think that the Committee has struck the right balance between satisfying the needs of the House and the public to judge the nature of an hon. Members outside influences and his entitlement to a proper degree of privacy. Therefore, I believe that to depart substantially from either side of the lines recommended by the Select Committee would be to invite this House to go up a wrong alley.
The probity of hon. Members obviously depends not only on a system of declaring interests—I think that we can all agree on that, because no system can be foolproof—but fundamentally and naturally


on the integrity that we each bring when we come to this House. If that is to be sustained, it will need to exist within a framework which runs within the grain of human ambition, not against it.
We have all made great efforts to come here, and most of us have made considerable sacrifices—sacrifices which our wives and families have to bear as well. I have always been impressed in the time that I have been here by the conscientiousness of the overwhelming majority of hon. Members on both sides of the House.
Any code of honour, however reinforced by rules such as the Committee has suggested, also requires a fair system of financial remuneration. In short, it requires a system which strengthens our desire to behave honourably towards one another and to the world outside. I think that it should also be a system of remuneration which recognises that our duties both here and in the constituencies have first call on our time and abilities.
Therefore, when we vote tonight, if there is to be a vote, I hope that the House will support the Committee's recommendations. They were presented with the full understanding that they cannot be foolproof. However, I believe that they will be all the more effective if we in this House recognise that the disclosure of interests is but a part of the fabric which guides our conduct here.

9.32 p.m.

Mr. John Nott: I must apologise to the House for not having been present throughout the debate, but I have been in Committee upstairs.
From the time that I entered this House and throughout my Parliamentary career I have always registered in all the reference books the details of my directorships and the boring, tedious details of my earlier career. I just happen to have done that. Also, I have always let my local Press know whenever I have had an interest which I thought might be of relevance to my constituents.
I believe that the British people have an exaggerated attitude towards personal confidentiality. If it were the general rule in the country that tax returns should be published, I would happily go along with it.
But I find the form that hon. Members will be required to sign both repugnant and ridiculous. I believe that if more

hon. Members had seen it, attitudes might have been rather different from what we have heard in many speeches tonight. The form places the onus on hon. Members to show that they are honest. I think that the onus should be on others outside to show that hon. Members are not honest. Then, if outsiders make imputations against Members of Parliament, they must face the consequences, a libel action or other sanctions of the law.
Am I expected to list in item No. 8 the fact that I have a home in my constituency and another in London? I do not think that is an interest which is relevant to my parliamentary duties. As I understand it, if I owned a yacht or a Rembrandt, that would also be relevant and would have to be shown on the register.
Turning to item No. 9, I am a shareholder in a company which happens to own about a mile of coarse fishing in Cornwall. There is the occasional salmon in the river as well. Am I expected to register my interest in a company which has nothing but some fishing rights in Cornwall? Clearly I am meant to do so.
If hon. Members do not fill in the form, what are to be the consequences? I want to follow this point through. Presumably an hon. Member would first be censured by the House or by you, Mr. Speaker. If the hon. Member still refused to sign and send in the form, what would happen? I suppose that he would be debarred by other hon. Members from representing his constituents.
My constituents would find it very odd if the hon. Member for Bassetlaw (Mr. Ashton) were to be part of a group of hon. Members who debarred me from the House. He used the phrase "cheap public relations activists". The hon. Gentleman is not a "cheap" activist but he is a public relations activist on behalf of the trade union movement, and many of my constituents would find it very odd that I could be debarred from this House by the hon. Member for Bassetlaw because I had not signed a form. Ultimately, presumably, an hon. Member who did not do so would be expelled from the House, and then what would happen? Presumably he would put his name forward in the subsequent by-election and be re-elected to this House, which would then open up a


major constitutional debate. What would the House do?
In practice, it requires only 10 or 20 Members of this House to refuse to send in forms and then the whole thing becomes ridiculous; because if one follows through the argument it would simply not be possible to debar 20 Members from the House. Surely hon. Gentlemen would agree with that.
Finally, I come to the comments of the hon. Member for Fife, Central (Mr. Hamilton). This House is not a club. The hon. Gentleman implied that because we all get together and agree rules by majority vote, somehow Members have to agree to them. This House is not a club. We are sent by our constituents to represent their interests. I come back to what I understand the right hon. Member for Down, South (Mr. Powell) to have said. If this were the law of the land, that would be one thing, but I do not believe that the House is really entitled to pass a resolution which bars me, if I refuse to send in a form, from representing my constituents in this House of Commons.

9.37 p.m.

Mr. Angus Maude: I believe the whole House will be aware that I was myself a member of the Select Committee whose report we are discussing, and naturally I hope that the House will accept it. Before getting on to the details of the debate, I would like to say how grateful I believe all the members of the Select Committee are to the Leader of the House for the way in which he commended the report and for the fact that the Government have accepted it completely. We should certainly wish to echo his tribute to the right hon. Member for Sunderland, North (Mr. Willey) for the way in which he took the chair during the deliberations of the Committee.
I should like to get out of the way first the question of the amendment moved by the hon. Member for Newham, South (Mr. Spearing), because I am afraid that I have, in the friendliest way, to take issue with the right hon. Member for Sunderland, North. He said with some justified self-satisfaction that the report of the Select Committee was unanimous.

It was. But had the amendment of the hon. Member for Newham, South, who was himself a member of the Committee, been incorporated in the report or proposed to have been incorporated in it, the Select Committee would not have been unanimous, because certainly my hon. and learned Friend the Member for Wimbledon (Sir M. Havers) and I could not have accepted it.
I should like briefly to say why we could not accept the amendment and why we hope that the hon. Member will withdraw it. Despite what a number of hon. Members have said about the vagueness of some of the provisions, we regard the amendment as being completely vague. It goes well beyond the limits which the Select Committee sought to set down in the register and it opens a range of disputable territory which, we believe, would cause a considerable degree of difficulty to the registrar, to the Select Committee and indeed to hon. Members. We believe that the line the Committee drew in its report is defensible and that it will work. We do not believe that if we go outside that line it will work. I am sorry that the unanimity of the Committee has been breached by a postcript which appears to have the support of the Chairman of the Select Committee.

Mr. Willey: On the postscript, I take the point that the hon. Gentleman is making. If this is not unanimously accepted by the Committee, I would merely say that I have made a personal remark about the proposal made by way of the amendment, but of course I would stand by the unanimity of the Committee. I only expressed a personal view on the effect of accepting the amendment, but I certainly could not support the amendment in view of what the hon. Gentleman has said, because I respect the unanimity of the Committee.

Mr. Maude: I am obliged to the right hon. Gentleman. I am glad he takes that view, which I am sure is right.
A number of points emerged in the debate which were predictable. Every member of the Committee was aware that some hon. Members would be against the report, because they were against the original resolutions of the House and, therefore, thought that the Report went too far, and that some hon. Members


would take the view that the recommendations of the Select Committee did not go far enough. Both of those opinions have been expressed.
Those hon. Members who, like the right hon. Member for Down, South (Mr. Powell) and the right hon. Member for Vauxhall (Mr. Strauss), were against the resolutions of the House in the first place have, perhaps, found it convenient to try to pour ridicule on the recommendations of the Select Committee by even suggesting that they do not go far enough. That is a fairly well-known debating technique. However, I do not believe that their arguments were wholly fair.
There were some members of the Select Committee, from the Opposition side of the House, who voted against the original resolutions. I did so myself, not because of any high constitutional views of their impropriety but because of the largely cynical view that nowadays the influence of any back-bencher over affairs and legislation is so minimal that he would never be worth trying to corrupt. Therefore, I thought it hardly worth while to go to all the trouble.
However, members of the Select Committee were asked to interpret and to carry out resolutions which the House had passed. We had no authority to go beyond that. We tried to produce a system—and I think we did it successfully—which, without going beyond the spirit of the resolutions that the House had passed, tried to carry out that spirit adequately, and the letter of it as well.
It has been said that the recommendations for the register are vague. They will necessarily be vague unless the House tries to deal in detail with every conceivable eventuality and with any dishonest hon. Member who is determined to conceal his interests and to thwart the intentions. We could not cover every conceivable eventuality or attempt by a dishonest hon. Member to evade the intention of the rules.
I beg the House to consider, from a common-sense point of view, the doubts or difficulties which, for example, the right hon. Member for Vauxhall has raised about receiving a substantial amount of income from property or land. The £30,000 house about which the right hon. Gentleman spoke could not conceivably be significant except for declarations in a case where, for example, the

line of a motorway was to run within 100 yards of the site of the house. Nobody imagines that that would be something which an hon. Member would need to register. The intention of that category is quite clearly to deal with somebody whose property holdings are so large or of such a nature that he would be influenced by them in dealing with such matters as the nationalisation of land, the municipalisation of private housing and property, the economics of farming, tied cottages and so on. It is a matter of common sense.
This applies to many of the other matters of which the right hon. Gentleman and other Members spoke. The right hon. Gentleman asked whether writing a newspaper article would be classed as a paid vocation or employment. My reply is "One newspaper article, no, because the remuneration from it will not influence an hon. Member." I am a professional part-time, free-lance journalist and, of course, I should declare and register that as a paid profession. If hon. Members want to try to keep within the spirit of the recommendations, and if they use their common sense and consult the Registrar, who will use his common sense, I do not think that any real difficulty can arise. I hope that this kind of argument will not be used.
One or two hon. Members wanted the recommendations to go further. I shall not spend too much time on the individual cases, because the Minister will no doubt wish to refer to some of them when he replies. I must, however, refer to the question of parliamentary and Lobby journalists. I dare say that hon. Members who have it in for parliamentary journalists may think it fun to try to catch them on the same hook, but let us use our common sense. Parliamentary journalists do not vote in the House of Commons. Let us remember that what we are trying to do is to delineate the area of interests which can influence Members of Parliament in the conduct of parliamentary business. Therefore, we should be going far outside that if we tried to pursue the parliamentary journalists.
My hon. Friend the Member for Wokingham (Mr. van Straubenzee) said he thought that public relations consultants had been unfairly singled out by comparison with other people. That is


an arguable point, but it must be remembered that an hon. Member who is working for a public relations firm or as a consultant is a propagandist, and in some sense a lobbyist himself. We are really concerned only to identify the interests and the influence which may be brought to bear on those Members in so far as that job arises out of their being Members of the House of Commons, where it is clear that they would not be in the job unless they were Members of Parliament. It is clearly right that the public should know what that influence is and what might be involved in it.
A number of hon. Members mentioned the question of wives. It is easy to say that if we exclude shareholdings or property holdings by wives we make a nonsense of the whole matter. But if anyone intends to evade the spirit of this he will evade it anyway. I ask the House to consider, as the Select Committee did, the difficulties that we should get into if we tried to enforce the registration of property holdings and shareholdings of spouses. First, what happens if a wife tells an hon. Member "I won't tell you what my shareholdings are"? She may say that, or her trustee may if she is a beneficiary under a trust. She may say it either because the couple are temporarily estranged or because she has high views about the sanctity of women's property rights, which the House has recently legislated to improve.
Will Labour Members, who have often taken a very high line about the rights of married women, legislate to force the wives of Members of Parliament to do something which no other wife is compelled to do, or will they expel an hon. Member because he has had a row with his wife and she will not tell him how many shares in ICI she owns? It is necessary for the House to consider from a common-sense point of view what this involves.
All the elements in the argument are susceptible to common-sense solutions by people who genuinely want to make the proposal work. I hope that both those who think that it goes too far and those who think that it does not go far enough will recognise that it is not a final solution that we are proposing. It is an experiment capable of being changed by

the House, on the advice of the Select Committee.
I hope that the hon. Member for Newham, South (Mr. Spearing) will withdraw his amendment. My hon. and learned Friend and I will certainly vote for the substantive motions and hope that the House will do so too.

9.50 p.m.

The Parliamentary Secretary to the Privy Council Office (Mr. William Price): This has been an interesting debate. It is clear that it was appropriate to leave it to the House to decide. There are genuine differences of opinion, and we should have been in some difficulty had it been other than a free vote.
It has long been apparent that there were two extreme views. One would have had little or no disclosure of information. The other would have involved every Member giving every single detail. I believe that the majority of Members take a view somewhere in the middle. They believe that the public should be aware of certain interests, and that those should be readily available.
It may be that the House will come to the view that the Select Comittee has found an acceptable compromise, producing a formula which gives the appropriate amount of information whilst protecting some of the privacy of Members.
I find the argument that we are public figures, and should therefore expect to be more accountable than most, to be agreeable. What I do not accept is the argument that I should be entitled to no privacy at all. This is a delicate matter and one in which the confidence of the public is of concern to us. What we have to do is to find a means of retaining public support for Parliament and its Members and for regaining any of that support which has been lost in the past.
The right hon. Member for Down, South (Mr. Powell) referred to giving way to clamour and the near hysteria with which this matter has been debated. Even if he is right, I do not regard that as necessarily a good reason for not proceeding.
We have not reacted without considerable thought. The matter has dragged on for a very long time. Some of my colleagues would argue that it has dragged on for far too long. We are, it is true, acting now in a much calmer atmosphere.


Surely that is the time at which to deal with it, before any clamour could possibly arise in the future. The right hon. Gentleman said that we know enough about each other to be able to judge motives. That, too, is true. What we are seeking to do is to enable the public, too, to judge motives.
My right hon. Friend the Member for Sunderland, North (Mr. Willey), pointed out that the register is supplementary. It is no great innovation to ask Members to declare their interests. We already do so, or should do so. We are perhaps clarifying the situation, tightening it a little and making the information more readily available.
The hon. Member for Halesowen and Stourbridge (Mr. Stokes) argued that there was no demand for a register in the House. He said that in a intervention, and later referred to the public. Dealing with the first point, I remind him that the voting was two to one, and that 363 members of this House voted 15 months ago for a register. It is difficult, in those circumstances, to understand his argument.
The hon. Member for Wokingham (Mr. van Straubenzee) made the most persuasive speech that I have heard on this subject. He did more to convince me personally than my own speech is likely to do.
We should all, I think, despite what the right hon. Gentleman said, look carefully at his remarks about journalists. Those who sit in the Gallery and write about our secretarial allowances, our postage, our car mileage, as perks, ought to be as responsible as we are, and I hope that the Select Committee will return to this matter in due course.
I would take exception to his argument on one issue—that increasing dependence on parliamentary salaries is taking independence from back benchers and putting more influence into the Whips' Office. My hon. Friend the Member for Fife, Central (Mr. Hamilton) dealt with that very well. I should have thought that at least from this side of the House, and at least at this particular time, there does not appear to be any lack of independence.
My hon. Friend the Member for Newham, South (Mr. Spearing) has moved his amendment. We have no objection to it

although I believe that there is substance in the argument that this is a matter that can be dealt with by the Select Committee in the light of experience.
My right hon. Friend the Member for Vauxhall (Mr. Strauss) drove a large horse and cart through the Chamber with many of his points. We are feeling our way, as he said. We are moving slowly and with some trepidation. All of these matters can be and will be considered by the Select Committee if the need arises.
My hon. Friend the Member for Fife, Central said that we can close the loopholes as we go. My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) dealt with his amendment with his customary fair-mindedness and unexpected brevity. We regard his amendment as being quite practical but somewhat illogical and could not recommend the House to oppose it. We are grateful to him for giving hon. Members the opportunity to vote on the matter.
My hon. Friend the Member for Basset-law (Mr. Ashton) has been consistent and determined in his approach. He has done as much as any hon. Member to bring this to the House. We should recognise that—even if the water did get hot at one stage.

Mr. Ashton: I asked a question about making the books of the Catering Sub-Committee available to any hon. Member. Will my hon. Friend pursue that?

Mr. Price: That is a matter that ought to be decided by the Select Committee rather than by me tonight. I will pass on my hon. Friend's request that it should receive urgent consideration. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) referred to "substantial". I have my own reservations here. The term is relative. What may be insubstantial to one hon. Member, may be a fortune to another. I do not mind declaring my interest. I belong to the latter category. I was asked recently to visit a land owner who felt that he was having a financial struggle. This man lives in Warwickshire and owns 15,000 acres of the best agricultural land in the country. I do not know what he regards as substantial. I do know that his attitude would be rather different from mine. This, too, is something that the Select Committee can ponder.
Whatever we decide, it is clear that much will depend upon the continued good sense and responsibility of hon. Members. This is not an easy matter. It is difficult to define "financial interest" and it is far from easy to be certain what could or could not influence any hon. Member here or outside. In the past we have relied on Members to use their judgment, and we shall continue to do so. What we are here deciding is whether we take the process one step forward.
The important consideration is, will a public register give those who send us here more faith in us and in Parliament as an institution? As a journalist I spent most of my life, before entering Parliament, reporting affairs in national and local government. I came across very little dishonesty, fiddling and corruption.

I do not believe that people always appreciate that corruption in British government at all levels is practically nonexistent. Where it is to be found, a vigilant Press and the courts will deal with it.

Our constituents will think well of us tonight if we vote for these motions. If we reject them, they will inevitably believe that there are matters on which we prefer they should not have information. Tonight we have the chance to improve our image.

Mr. Spearing: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Main Question put:—

The House divided: Ayes 181, Noes 21.

Division No. 231.]
AYES
[10.0 p.m.


Ashton, Joe
Fookes, Miss Janet
Mikardo, Ian


Atkins, Rt Hon H. (Spelthorne)
Forrester, John
Millan, Bruce


Atkinson, Norman
Fowler, Gerald (The Wrekin)
Miller, Dr M. S. (E Kilbride)


Bain, Mrs Margaret
Fowler, Norman (Sutton C'f'd)
Molloy, William


Banks, Robert
Freud, Clement
Morris, Alfred (Wythenshawe)


Barnett, Guy (Greenwich)
George, Bruce
Morris, Michael (Northampton S)


Bates, Alf
Ginsburg, David
Moyle, Roland


Bean, R. E.
Golding, John
Mudd, David


Beith, A. J.
Gould, Bryan
Mulley, Rt Hon Frederick


Benn, Rt Hon Anthony Wedgwood
Gow, Ian (Eastbourne)
Newton, Tony


Bennett, Andrew (Stockport N.)
Grocott, Bruce
Noble, Mike


Bidwell, Sydney
Hall-Davis, A. G. F.
Oakes, Gordon


Bishop, E. S.
Hamilton, W. W. (Central Fife)
O'Malley, Rt Hon Brian


Blenkinsop, Arthur
Hardy, Peter
Ovenden, John


Booth, Albert
Harper, Joseph
Park, George


Bray, Dr Jeremy
Harrison, Walter (Wakefield)
Pavitt, Laurie


Brown, Robert C. (Newcastle W)
Hatton, Frank
Pendry, Tom


Budgen, Nick
Havers, Sir Michael
Penhaligon, David


Callaghan, Jim (Middleton &amp; P)
Henderson, Douglas
Perry, Ernest


Campbell, Ian
Horam, John
Prescott, John


Canavan, Dennis
Howell, Denis (B'ham, Sm H)
Price, William (Rugby)


Cant, R. B.
Hoyle, Doug (Nelson)
Radice, Giles


Carmichael, Neil
Hughes, Rt Hon C. (Anglesey)
Rathbone, Tim


Carter-Jones, Lewis
Hughes, Robert (Aberdeen N)
Reid, George


Chalker, Mrs Lynda
Hunter, Adam
Richardson, Miss Jo


Clark, Alan (Plymouth, Sutton)
Jackson, Miss Margaret (Lincoln)
Roderick, Caerwyn


Clegg, Walter
James, David
Rodgers, George (Chorley)


Cockcroft, John
John, Brynmor
Rooker, J. W.


Cocks, Michael (Bristol S)
Johnson Smith, G. (E. Grinstead)
Roper, John


Cohen, Stanley
Jones, Alec (Rhondda)
Rose, Paul B.


Concannon, J. D.
Jones, Arthur (Daventry)
Ross, Stephen (Isle of Wight)


Cook, Robin F. (Edin C)
Jones, Dan (Burnley)
Ross, Rt Hon W. (Kilmarnock)


Corbett, Robin
Kaufman, Gerald
Rossi, Hugh (Hornsey)


Costain, A. P.
Kerr, Russell
Rowlands, Ted


Crouch, David
Kilroy-Silk, Robert
Shaw, Giles (Pudsey)


Cryer, Bob
Knox, David
Short, Rt Hon E. (Newcastle C)


Davies, Bryan (Enfield N)
Lamborn. Harry
Short, Mrs Renée (Wolv NE)


Davis, Clinton (Hackney C)
Latham, Michael (Melton)
Silkin, Rt Hon John (Deptford)


Deakins, Eric
Lomas, Kenneth
Silverman, Julius


Dormand, J. D.
Loyden, Eddie
Skinner, Dennis


Dunnett, Jack
Luard, Evan
Small, William


Dunwoody, Mrs Gwyneth
MacCormick, Iain
Snape, Peter


Durant, Tony
MacFarquhar, Roderick
Spearing, Nigel


Eadie, Alex
Mackenzie, Gregor
Spriggs, Leslie


Edge, Geoff
McNamara, Kevin
Stallard, A. W.


English, Michael
Madden, Max
Stewart, Donald (Western Isles)


Evans, John (Newton)
Marks, Kenneth
Stewart, Ian (Hitchin)


Ewing, Harry (Stirling)
Marshall, Jim (Leicester S)
Stewart, Rt Hon M. (Fulham)


Eyre, Reginald
Maude, Angus
Stoddart, David


Fernyhough, Rt Hon E.
Maynard, Miss Joan
Thomas, Mike (Newcastle E)


Fisher, Sir Nigel
Mellish, Rt Hon Robert
Thomas, Ron (Bristol NW)


Flannery, Martin
Mendelson, John
Thompson, George




 Thorne, Stan (Preston South)
Watkins, David
Wilson, Alexander (Hamilton)


Tierney, Sydney
Watkinson, John
Wilson, Gordon (Dundee E)


Tomlinson, John
Watt, Hamish
Wise, Mrs Audrey


Trotter, Neville
Weatherill, Bernard
Woodall, Alec


Urwin, T. W.
Weetch, Ken
Wrigglesworth, Ian


Varley, Rt Hon Eric G.
Welsh, Andrew



Vaughan, Dr Gerard
White, Frank R. (Bury)
TELLERS FOR THE AYES:


Walker, Harold (Doncaster)
Whitehead, Phillip
Mr. James A. Dunn and


Walker, Terry (Kingswood)
Whitlock, William
Mr. John Ellis.


Ward, Michael
Willey, Rt Hon Frederick





NOES


Benyon, W.
Lamond, James
Powell, Rt Hon J. Enoch


Brotherton, Michael
Lyon, Alexander (York)
Shersby, Michael


Channon, Paul
Mather, Carol
Tebbit, Norman


Drayson, Burnaby
Moate, Roger
Winterton, Nicholas


Galbraith, Hon. T. G. D.
Monro, Hector



Goodhew, Victor
More, Jasper (Ludlow)
TELLERS FOR THE NOES:


Hamilton, Michael (Salisbury)
Nott, John
Mr. James Molyneaux and


Hurd, Douglas
Pattie, Geoffrey
Mr. John Stokes.


Hutchison, Michael Clark

Question accordingly agreed to.

Resolved,
That, pursuant to the Resolutions of the House of 22nd May 1974, this House agrees with the recommendations made in the Report of the Select Committee on Members' Interests (Declaration) relative to the arrangements for the registration of Members' Interests, and with the recommendations contained in paragraphs 43 and 47 of that Report in relation to the declaring of such interests; and that a register of such interests be established as soon as possible in accordance with the proposals made in that Report.

Orders of the Day — MEMBERS' INTERESTS (DECLARATION) (No. 2)

Motion made,
That, for the purposes of the Resolution of the House of 22nd May 1974 in relation to disclosure of interests in any proceeding of the House or its Committees—
(i) any interest disclosed in a copy of the register of Members' Interests shall be

regarded as sufficient disclosure for the purpose of taking part in any Division in the House or in any of its Committees;

(ii) the term 'proceeding "shall be deemed not to include the giving of any written notice, or the asking of a supplementary question.—[Mr. Edward Short.]

Mr. Speaker: Does the hon. Member for Newcastle-under-Lyme (Mr. Golding) wish to move his amendment?

Mr. John Golding: Yes, Mr. Speaker.

Amendment proposed, after 'notice' insert:
'other than that of a question in relation to which the Member giving notice thereof has an interest which is recorded in the register'.—[Mr. Golding.]

Question put, That the amendment be made:—

The House divided: Ayes 76, Noes, 94.

Division No. 232.]
AYES
[10.12 p.m.


Ashton, Joe
Harper, Joseph
Richardson, Miss Jo


Atkinson, Norman
Hatton, Frank
Roderick, Caerwyn


Barnett, Guy (Greenwich)
Horam, John
Rodgers, George (Chorley)


Bean, R. E.
Hoyle, Doug (Nelson)
hooker, J. W.


Benn, Rt Hon Anthony Wedgwood
Hughes, Robert (Aberdeen N)
Roper, John


Bennett, Andrew (Stockport N.)
Jackson, Miss Margaret (Lincoln)
Rose, Paul B.


Bidwell, Sydney
Kaufman, Gerald
Short, Mrs Reneé (Wolv NE)


Booth, Albert
Kilroy-Silk, Robert
Skinner, Dennis


Bray, Dr Jeremy
Knox, David
Snape, Peter


Callaghan, Jim (Middleton &amp; P)
Loyden, Eddie
Spearing, Nigel


Carter-Jones, Lewis
Luard, Evan
Spriggs, Leslie


Cocks, Michael (Bristol S)
MacFarquhar, Roderick
Stallard, A. W.


Cook, Robin F. (Edin C)
McNamara, Kevin
Thomas, Ron (Bristol NW)


Corbett, Robin
Madden, Max
Thorne, Stan (Preston South)


Cryer, Bob
Marks, Kenneth
Tierney, Sydney


Davies, Bryan (Enfield N)
Marshall, Jim (Leicester S)
Varley, Rt Hon Eric G.


Deakins, Eric
Maynard, Miss Joan
Walker, Terry (Kingswood)


Dunwoody, Mrs Gwyneth
Mellish, Rt Hon Robert
Watkinson, John


Edge, Geoff
Mikardo, Ian
White, Frank R. (Bury)


Ellis, John (Brigg &amp; Scun)
Molloy, William
Whitlock, William


English, Michael
Noble, Mike
Wise, Mrs Audrey


Evans, John (Newton)
O'Malley, Rt Hon Brian
Woodall, Alec


Fernyhough, Rt Hon E.
Ovenden, John



Flannery, Martin
Fark, George
TELLERS FOR THE AYES


George, Bruce
Frescott, John
Mr. John Golding and


Gould, Bryan
Radice, Giles
Mr. Phillip. Whitehead.


Grocott, Bruce
Rathbone, Tim





NOES


Atkins, Rt Hon H. (Spelthorne)
Harrison, Walter (Wakefield)
Penhaligon, David


Bain, Mrs Margaret
Havers, Sir Michael
Price, William (Rugby)


Banks, Robert
Henderson, Douglas
Reid, George


Bates, Alf
Howell, Denis (B'ham, Sm H)
Ross, Stephen (Isle of Wight)


Beith, A. J.
Hughes, Rt Hon C. (Anglesey)
Ross, Rt Hon W. (Kilmarnock)


Benyon, W.
Hunter, Adam
Rossi, Hugh (Hornsey)


Bishop, E. S.
Irvine, Bryant Godman (Rye)
Rowlands, Ted


Blenkinsop, Arthur
James, David
Shaw, Giles (Pudsey)


Brotherton, Michael
John, Brynmor
Shersby, Michael


Brown, Robert C. (Newcastle W)
Johnson Smith, G. (E. Grinstead)
Short, Rt Hon E. (Newcastle C)


Campbell, Ian
Jones, Alec (Rhondda)
Silkin, Rt Hon John (Deptford)


Canavan, Dennis
Jones, Arthur (Daventry)
Silverman, Julius


Cant. R. B.
Jones, Dan (Burnley)
Small, William


Carlisle, Mark
Lamborn, Harry
Stewart, Donald (Western Isles)


Channon, Paul
Lamond, James
Stewart, Ian (Hitchin)


Cohen, Stanley
Latham, Michael (Melton)
Stewart, Rt Hon M. (Fulham)


Concannon, J. D.
MacCormick, Iain
Tebbit, Norman


Davis, Clinton (Hackney C)
Mackenzie, Gregor
Thompson, George


Dormand, J. D.
Mather, Carol
Tomlinson, John


Dunnett, Jack
Maude, Angus
Urwin, T. W.


Eadie, Alex
Millan, Bruce
Ward, Michael


Ewing, Harry (Stirling)
Miller, Dr M. S. (E Kilbride)
Watt, Hamish


Forrester, John
Moate, Roger
Weatherill, Bernard


Fowler, Gerald (The Wrekin)
Monro, Hector
Welsh, Andrew


Freud, Clement
Morris, Alfred (Wythenshawe)
Willey, Rt Hon Frederick


Galbraith, Hon. T. G. D.
Morris, Michael (Northampton S)
Wilson, Alexander (Hamilton)


Ginsburg, David
Moyle, Roland
Wilson, Gordon (Dundee E)


Glyn, Dr Alan
Mulley, Rt Hon Frederick
Winterton, Nicholas


Goodhew, Victor
Newton, Tony



Gow, Ian (Eastbourne)
Nott, John
TELLERS FOR THE NOES


Hall-Davis, A. G. F.
Oakes, Gordon
Mr. James A. Dunn and


Hamilton, Michael (Salisbury)
Pavitt, Laurie
Mr. David Stoddart.


Hardy, Peter
Pendry, Tom

Question accordingly negatived.

Main Question put and agreed to.

Orders of the Day — STATUTORY INSTRUMENTS

Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments),

Orders of the Day — NORTHERN IRELAND

That the Agriculture (Miscellaneous Provisions) (Northern Ireland) Order 1975, a draft of which was laid before this House on 6th May, be approved.—[Mr. Walter Harrison.]

That the Defective Premises (Northern Ireland) Order 1975, a draft of which was laid before this House on 13th May, be approved.—[Mr. Walter Harrison.]

That the Roads (Northern Ireland) Order 1975, a draft of which was laid before this House on 13th May, be approved.—[Mr. Walter Harrison.]

Orders of the Day — VALUE ADDED TAX

That the Value Added Tax (Boats and Outboard Motors) Order 1975 (S.I., 1975, No. 745), a copy of which was laid before this House on 7th May, be approved.—[Mr. Walter Harrison.]

Question agreed to.

Orders of the Day — ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dunn.]

Orders of the Day — BRITISH UNITED TRAWLERS (DISMISSALS)

10.22 p.m.

Mr. Michael Brotherton: I am grateful to have the opportunity to raise the case of two of my constituents—namely, Mr. Albert Carr and Mr. Albert Miall—who were dismissed by British United Trawlers on Thursday 15th May. Mr. Carr and Mr. Miall both live in Cleethorpes, in my constituency, although they work in Grimsby.
The background to the case is that on 8th May 1974 a national strike was called by the AUEW in protest against the fine imposed on that union by the Industrial Relations Court. Mr. Miall, Mr. Carr and a third man, Mr. Stevens, refused to take part in that strike. As a result of that action they were sent to Coventry by their workmates—in other words, their workmates would not work with them. Basically the three of them worked together as a small team.
At the start of this year Mr. Stevens emigrated to South Africa. He came to take a somewhat emotional farewell of me, saying that he no longer wished to stay in this country if people were to be treated in such a manner by their workmates. Mr. Carr and Mr. Miall came to see me in January of this year. My first action was to write to Mr. Scanlon of the AUEW to ask him about the dispute between his union and these two men who remained members of the union. I received a reply in April, which reads:
Dear Sir, we refer to our letter of 10th February 1975 and your letter of 29th January. We have received a report from our Grimsby District Secretary and can find no evidence of any dispute between our Grimsby District Committee and any constituent of yours who is employed at British United Trawlers.
This was absolute nonsense. Mr. Carr and Mr. Miall remained members of the union but their fellow unionists refused to work with them.
I come now to the action and conduct of the company. In January of this year

Mr. Carr and Mr. Miall applied to Mr. Bill Letten, the Deputy Managing Director of British United Trawlers. Mr. Letten is responsible for all the trawler operations out of Grimsby. However, he refused to see them.
On 11th April Mr. Carr and Mr. Miall received a letter from Mr. Fraser of the company informing them officially of the disciplinary action which had been taken against them because they had said they no longer wanted to work with each other as they were getting on each others' nerves. The letter said:
The purpose of this letter is to confirm what was said and the action taken at an interview in my office this morning at 8 a.m. … I then informed you that your conduct on the morning of Friday 4th April constituted industrial indiscipline, that I was now giving you formal warning of that fact and that any further breach of discipline on your part could prejudice your subsequent employment with the Company.
This formal warning was recorded in your presence, in the log book kept in this office, the entry signed by myself and countersigned by Mr. A. E. Trigg.
Why were the other members of the work force who refused to work with Mr. Carr and Mr. Miall not disciplined? I fail to see any difference in the relationship of these workmen in refusing to work with Mr. Miall and Mr. Carr and that of Mr. Carr and Mr. Miall in declining to work together. These two men had suffered quite a lot by this stage and were disciplined because they would not work together.
In British United Trawlers there have been other cases of indiscipline over the last few months. One of the employees threw hot tea over another employee and no disciplinary action was taken. Earlier this year one of the employees of British United Trawlers went to sea in one of the company's vessels and the captain turned back because the man was so drunk that he constituted a hazard at sea and had to be landed by the Spurn light vessel and sent back. A third man employed by the company was being paid overtime but was found shopping in the town. The only action taken against him was that he was to be fined one hour's pay. There seem to be two very different types of law employed by British United Trawlers in respect of their discipline over employees.
On 15th May this year Mr. Carr and Mr. Miall received identical letters from British United Trawlers. They said:
We do not comment on the events which created and maintained this unwillingness of your fellow work people to work alongside you; that you should pay due regard to the strength of their feelings has always been our advice to you.
What about the strength of feeling of Mr. Carr and Mr. Miall, men who refused for reasons of conscience to take part in a political strike? I fail to see why men should lose their jobs because of political convictions sincerely held.
The letter continued:
During attempts at conciliation you have been advised by us and by others of the nature and scope of a compromise. You have not wished to compromise and have throughout made clear to us that you had no intention of so doing.
Mr. Carr and Mr. Miall were happy and content to work with the other people in the work force at British United Trawlers. It is not these two men who are sending their workmates to Coventry; the workmates are doing it to them.
The letter continues:
During the whole of this period we have consistently tried to afford you work of similar content and scope to that given to other employees in your trade. However, as you yourself have commented, in this industry there are severe limitations on the scope of work, when for extraneous reasons the allocation is restricted to only one or two people and it has been extremely difficult for us to operate first with the three of you, and latterly with you and Mr. Miall as a small team.
This I agree with. The company has not been in a particularly easy position over the problem. The difficulties were not created by Mr. Carr and Mr. Miall refusing to work but by their fellow employees refusing to work with them.
Payments made by British United Trawlers to Mr. Carr and Mr. Miall were eight and four weeks' severance pay respectively—the bare minimum it had to pay by law. I regard this as the final insult levelled at these two men by their previous employers. I hope that the Minister in his reply will comment on the way in which British United Trawlers behaved.
The way in which these men have been treated by British United Trawlers brings

to mind some words spoken by Edmund Burke on 22nd March 1775:
'It is not what a lawyer tells me what I may do but what humanity, reason and justice tell me I ought to do.
I believe that Mr. Carr and Mr. Miall are entitled to humanity, reason and justice.

10.32 p.m.

The Minister of State, Department of Employment (Mr. Albert Booth): The hon. Member for Louth (Mr. Brotherton) wrote to my right hon. Friend the Secretary of State about the dismissal of Mr. Miall and Mr. Carr on 22nd May, and I myself replied to his letter. I can understand why the hon. Member has raised the matter again in this Adjournment debate. Since, however, both men have already complained to an industrial tribunal of unfair dismissal under the provisions of the Trade Union and Labour Relations Act, I am sure that the hon. Member would not expect me to risk prejudicing judicial consideration of their complaint by commenting in detail on the merits of their case in our debate tonight.
Nevertheless, I would like to comment briefly on the statutory unfair dismissal procedure which the men have invoked. The Government have already made significant improvements to the procedure in the Trade Union and Labour Relations Act. For example, even if Mr. Miall and Mr. Carr had started work only on 8th May last year on the day of the union's strike against the fine in the Con Mech case, they would already have completed sufficient service with their employer to qualify them to complain of unfair dismissal.
Under the provisions of the Trade Union and Labour Relations Act, from 16th September of last year employees needed to have completed only 52 weeks' continuous employment with their employer before they became eligible to complain of unfair dismissal, and as from 16th March this year that period has been reduced to 26 weeks. Another important change which we introduced into the unfair dismissal provisions in the 1974 Act was to extend the normal time limit for making complaints from 28 days to three months. I understand that Mr. Miall's and Mr. Carr's employment was terminated when they were paid wages in lieu of notice in about the middle of May; they would then have until the


middle of August for their complaint to be sent to and received by the Central Office of Industrial Tribunals.
These extensions in the scope of the unfair dismissal provisions are worth while because experience of the statutory procedure has shown that employees who use the procedure have a good chance of securing a remedy for their dismissal. In the first place there is a chance for a conciliation officer of the Advisory, Conciliation and Arbitration Service to help the parties to reach an agreed settlement of a complaint without the need for a tribunal hearing. In 1972 and 1973 about one-quarter of the cases dealt with resulted in a settlement of this kind, and in 1974 the proportion was as high as 30 per cent. In each of the three years another 12 or 13 per cent. of completed cases resulted in a tribunal recommendation of reinstatement or re-engagement or an award of compensation or a redundancy payment. In fact, for 1974, when cases which were withdrawn or dismissed on grounds of ineligibility are excluded, nearly half of all completed cases were successful either at conciliation or at a tribunal hearing.
This does not mean that we are complacent about the quality of the remedies available to successful applicants. Although reinstatement was first identified as a separate remedy in the Trade Union and Labour Relations Act there have been very few tribunal recommendations of reinstatement since the Act came into force. Again, although we raised the upper limit for compensation from £4,160 to £5,200 in that Act the distribution of amounts of compensation agreed in conciliation and awarded by tribunals has changed very little since the Act came into force. This is why, as many hon. Members will know, we have decided to take further measures in the Employment Protection Bill to strengthen the remedy of reinstatement and re-engagement and to provide an irreducible minimum level of compensation for every unfairly dismissed employee who cannot be reinstated or re-engaged.
However, some of the hon. Gentleman's remarks might be taken to imply that the men's complaint of unfair dismissal should be partly directed against the fellow members of their union and not only against their employer. For

example, the hon. Gentleman is quoted in Lloyd's List of 23rd May as having made the following comment on the men's dismissal:
It is a sad day for Britain when large public companies like this should allow their workforce to be controlled by the militant Left—and not by the board of management".
It is not clear who are supposed to be the militant Left in this case. It is presumably either the men's workmates who are alleged to have "sent them to Coventry" or those members of the union's local branch who are alleged to have wanted to fine the men for not taking part in the strike on 8th May last year.
The first point to get clear is that a complaint of unfair dismissal must be a complaint against the employer. Conservative Members have sometimes argued that where an employer is induced to dismiss an employee by pressure from a third party—I am neither suggesting nor denying that there is evidence of such pressure in the present case—it should be possible for the employer to make the third party share the responsibility for an unfair dismissal. Indeed, the Industrial Relations Act included provision for the employer to join a third party to the case where a dismissal had been found unfair and to argue that the third party should repay to the employer part or all of the compensation awarded against him. We on this side have consistently argued that this is not the right approach. The employer takes the decision to dismiss, and it is therefore he who must defend this decision and face the consequences of it.
The statutory unfair dismissal procedure provides, however, for a conciliation officer of the ACAS to offer the parties his services to help them arrive at an agreed settlement of the complaint without the need for a tribunal hearing. At this stage there will sometimes be a chance of resolving a dispute between the dismissed employee and other members of the employer's work force so that the employee can resume his previous employment.
This case is in no way affected by the legislation relating to the closed shop. It is not related to the provisions for exclusion and expulsion from a union or to the union rules provisions of the legislation. It is important to set straight the


facts of the case as we understand them in relation to the law on these subjects.
First, these men have not been dismissed because they were not union members but were required, in accordance with the terms of a union membership agreement, to be union members. So far as we are aware, there is no closed shop agreement in operation in the establishment where the men were working. In any case, they are apparently still members of the union.

Mr. Brotherton: I assure the Minister that these men are still fully-paid-up members of the union and that they have done nothing to incur the displeasure of the union except that they refuse to take part in a purely political strike.

Mr. Booth: We are agreed at least that it is correct to debate this matter on the premise that these men are still members of the union.
Secondly, these men have not been arbitrarily or unreasonably expelled from their union. Still less have they been dismissed from employment as a result of such an expulsion. There appears to be no question of their bringing a complaint against their union under the present Section 5 of the Trade Union and Labour Relations Act as they are still union members and no action has been taken to expel them.
Thirdly, there has not, so far as I understand it, been any misapplication of the union's rules. Nor are the rules themselves defective or indaquate. Although it is not for me to explain or defend the union rules of the AUEW's engineering section—the union's officers are perfectly well able to do this themselves—as a member of another section of the same union I was naturally concerned at any thought that these men might have been unfairly treated by the union, even if that unfair treatment had no bearing on their dismissal.
My officials have therefore been in contact with the union's officers to establish whether any action was taken against them as a result of their refusal to take part in the strike on 8th May last year. My understanding is that no fine or other sanction was applied against them. The executive council of the union ruled that no action should be

taken against them, and the district committee confirmed that it would follow the executive council's lead at a meeting with Mr. Miall and Mr. Carr on 15th January this year. Moreover, I understand that the hon. Member for Louth was told that the district committee was not taking action against any of his constituents when he wrote to make inquiries in April of this year.
Against the background of this information it seems clear that any dispute over the two men's failure to take part in the strike last year was a clash with other members of the union who were working at the same firm, not a formal dispute with officials of the union.
There is therefore no basis in this case for anyone to argue, as has been argued in other contexts, that the law should intervene in union affairs to set their rule books in order. The AUEW's rule book is exceptionally full and very clear in providing for the settlement of disputes between the union and a member and for the procedure to be adopted at any hearings or appeals.
If for any reason the two men had been dissatisfied with the way in which they had been treated, on the grounds that the rules were unjust or had been misapplied, they could have sued the union—and they do not need any provisions in legislation to enable them to do so.
The saddest part of the whole story, however, is the origin of the dispute between the men and their workmates. If there had been no Industrial Relations Act there would have been no Industrial Relations Court, no Con Mech case, no fine and no strike in protest against the fine. This case is a poignant illustration of the divisive effects of trying to regulate industrial relations and solve industrial relations problems by legal sanctions instead of promoting practical co-operation between management, unions and workers within each firm. Difficulties in personal relationships on the shop floor cannot be legislated out of existence, but they can be faced and dealt with if everyone on the shop floor is involved in finding an agreed solution.
As I said at the outset, I cannot deal with the merits or demerits of a matter which is before an unfair dismissals tribunal. However, I hope that I have


indicated the Government's concern that for anyone who complains that he has been unfairly dismissed our legislation should provide machinery for redress. We are anxious that such amendments and improvements as we have made should provide a means of redress for

the hon. Gentleman's constituents or any other person in this land who feels that he has such a grievance.

Question Put and agreed to.

Adjourned accordingly at seventeen minutes to Eleven o'clock.